The Joongang reports the results of a roundtable they held on the FTA. Not worth the read, but this is an interesting statement:
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The Joongang reports the results of a roundtable they held on the FTA. Not worth the read, but this is an interesting statement:
Korea News via Google
59 Comments
Link doesn’t work.
When in fact the technology of Korean cars is fine, but the Korean consumers would go for the foreign cars anyway. Look at how much so many of them already pay for Mercedes, the quality of which is now (according to j.d. power) lower than Hyundai. My guess is that making these imports cheaper would do a lot to dim their appeal in a hi-price=quality mindset market like this.
Anyone else starting to see a fair number of Accords lately?
cm> Link works now. Sorry for the oversight. Thanks for telling me.
Why do the naysayers say that? Because it’s a scare mongering tactic.
Well, one automaker’s name is the abbreviation of Killed In Action and is a homonym for an abandoned child and starvation in Korean, so that may have something to do with the perceived suckiness.
Korean cars are pretty good these days, actually. The new SM7 is a treat. I don’t know if it’s a recycled Japanese or French design, but the execution is really very strong. So, too, is the quality of the new Hyundai Sonata and Grandeur models. These are nice cars. The Equus still is a bloated pig, but that’s what its target market wants.
What’s puzzling to me is the poor gas mileage of Korean automobiles, especially the so-called “economy” cars with sub-1000cc engine displacement. Is 26mpg considered a gas-saver anywhere other than Korea?
As cm said, I think it’s a scare tactic. These activists will say anything to derail the FTA. They think they can remain a somewhat insular market and continue to export to better health. In the short term they may be right, but without an FTA with the US, they are avoiding an important step to much better opportunities (and higher risks). If they really want to stay a middling economy and slowly decline while following the status quo, then that’s their choice, but I think there are plenty of people in Korea who will not be satisfied with that. After all, most Koreans are ambitious and want better.
I think a vote against an FTA with the US is a vote for mediocrity. An FTA presents new risks but also greater opportunities. Thankfully, Canada signed the NAFTA with the US and Mexico and hasn’t looked back economically after an initial period of difficulty in some regions.
is lpg used in the states? never heard of it until i got here.
This statement about Korean cars sucking is untrue. The ones that had Japanese engines built by Mitsubishi were pretty good.
–Remort
but the Korean consumers would go for the foreign cars anyway.
Status seeking, show-off traitors, they are. May a shit-driving ajumma smash up their pricey foreign cars.
Well, if it is driven in Korea, it is not a matter of “if” but rather a question of “when”.
“Status seeking, show-off traitors, they are.”
Trolling for comments with idiotic statements, are we Bluejives? OK, I’ll bite. Aren’t you American? Traitors? So if Americans don’t buy US products you would call them traitors? Or are you a ‘traitor’ to America for telling Koreans not to buy US products?
Personally, I will buy whatever products I like and I don’t give a damn what others think, after all, it’s my cash. As far as I’m concerned, the peanut gallery can either fork over some cash for my purchase or stuff it up their collective a**es.
I had a conversation the other day with an old Korean guy at Starbuck’s in which he complained that all the profits were going back to the US. I tried to explain that the Korean chains of these mega-chains are almost always owned and operated by Koreans, so plenty of the profits remain in-country. I was about to ask him why he was standing in line at Starbuck’s, but we were interrupted.
“all the profits were going back to the U.S.” There’s a lot of naivety in Korea about the way capitalism operates, because even the media here spouts that line, conveniently forgetting that a country dependent on exports such as this one is taking profits out of other countries as well.
Korea just signed an FTA with Iceland, Norway, Switzerland and Liechtenstein, so now it can “steal” profits from them more easily
http://english.chosun.com/w21d.....10013.html
‘Jives, I am sure that people that buy foreign cars have reasons other than selling out the country when they buy a foreign car. Be honest, if you had a choice and money, would you go for the German car, or the Korean car?
There’s a lot a naivety in Korea about how just about everything operates.
Thanks for the link about the new “FTA”. Good to see that Korea’s Rolens watches will be protected for a few more years. Five years from now we’ll be able to see if a married Korean couple was pre- or post-FTA.
What’s the hold up on the smoked salmon? And why is cheese never noted in the English-language press releases? I’m significantly less malodorous since I’ve finish off those hunks of Emmentaler and Gruyere I smuggled in a few years ago.
Snow, FYI, Starbucks in Korea is run by Shinsegae, the purly Korean department store that is a part of Samsung.
Ironically, the Korean Starbucks seem to make better coffee and look better than quite a few I’ve seen in the U.S.
Has anyone ever seen a gyopo in a Korean-made car?
Visit Korea town and it’s Lexus, Lexus, Lexus, Beamer, Lexus, Merc, Lexus…
Those who know Korea best know which cars to buy. And not buy.
seouldout — overpriced Emmentaler and Gruyere can be found at the Hannam market in the basement of the Volvo building on the road that leads down to Hannam Bridge. Also at the Costco in Yangjae. There’s good salmon (unsmoked) at Hannam market too.
Shakuhachi> Reminds me of one of my favorite stories. When I used to live in Orange County I worked in a fancy office by the airport. Around the corner was a wine shop that used to hold free tasting on Friday. Being 19 at the time, I found it a perfect opportunity to get free booze with minimal chance of getting carded. I became a fixture of sorts after a few weeks, and got to know many of the regulars. They were many the high price/powered lawyers and banker types who worked in the area.
One of the other fixtures was a lovable grandfatherly type named Nick. Nick virtually owned the store due to his regular bulk buys at the shop. One of his things was he was always out to prove the superiority of California wine. If any marketing rep was there giving tasting of French wines he would regularly just grab bottles of Californian wine and push in on everyone saying it was better and cheaper than that French stuff (and he was right mind you). At times he would go on how Californian wine was easily the best in the world.
Once in a while after Nick (and most of the crowd) had a few “tasting” he would start taking the others to task for driving around in Mercedes, BMW’s, and Lexus’s (the parking lot was filled with them given the clientele are the area). He would go on how Americans should by American cars, and how his Lincoln could beat all the foreign cars.
The funny thing was, Nick was naturalized US citizen from Italy who emigrated about 20 years prior. God I love my country some times…
“Starbucks in Korea is run by Shinsegae”
Thanks for the heads up, R.Elgin. I was thinking of individual McDonald’s which I’ve heard are Korean-owned, which I assumed meant franchising, rather than by a large Korean chain, but I may be wrong on that one, too.
So to re-state with the corrections, the owners of most chain shops in Korea are Korean franchisees or Korean corporations, meaning much of the profits remain in Korea.
Speaking of who profits from Starbucks, I actualy posted on that on my blog. Yes it is owned by Shinsegae, however many others profit as well.
Key word: overpriced.
When will Mr. Seouldout begin to see the benefits of all the FTAs that include food stuffs? I can name only one example: bananas. When I first arrived the Cheju-grown bananas were the only (legal) ones on the market, and they cost about $2 each. But they did have the great taste of diesel.
Michael, thanks for the info. Will be heading off for a vacation on the 22nd, so I’ll replenish my supplies. Something I’ve been doing for almost 20 years.
i thought starbucks don’t franchise their stores. i guess that’s only in the states.
dram_man, that sounds like my dad, although he’s not naturalized. he is always boasting about how great america is and if anyone says otherwise, he gets deeply offended. in fact, even though he is korean, he has no idea why i’m in korea. as we live in seattle, he is always telling people how seattle is the best city in the world. in fact, earlier this summer, some family friends in korea were going to new zealand for vacation. but my dad put a stop to that, telling them they have to go to the u.s.
Koreans really get shafted on produce–price and selection. Less expensive Chilean wine is another FTA benefit, although even that gets marked up here. I think a lot of Koreans fall for “if it’s expensive it must be good,” but to be fair, so do people in other countries. I saw really good wine in Paris last year for three euros a bottle and started weeping.
“Koreans really get shafted on produce–price and selection.”
Amen to that, although I hear the ones up North have it tougher than the ones in the South.
At any rate, even if the Korean farmers fail to adapt, I really have little doubt that they’ll survive in the post-FTA world. After all, they can just stop using chemical fertilizers and pesticides, slap an ‘organic’ label on their produce, and continue to sell it for 3x the price. Hippies will buy anything. 
i like the older SM5s, although i hear they’re terrible on gas. the new SM7s look sort of funny from behind, although i guess the selling point is that the trunk shape makes it easy to get your golf clubs in and out of the car.
anyone here ever heard of the Korean Santamo? it’s sort of half way between a station wagon and a SUV. the ones you see on the street are at least six years old (production stopped in 2000 i am told), but a lot of them look like new.
if you have ever been in one, owned one, driven one, know someone who has done any of the above, please let me know your opinions.
we’ve been running a five-year-old Visto for about a year now (one size larger than a Tico) and find it’s perfect for getting around the city (although 0.8 liters of engine can leave you hanging on the highway), but as soon as we load up our 70-plus-pound dog we hit our max capacity.
is the Santamo, with its extra bench in the back, the way to go? on a related note, should i be looking for an LPG engine (possible because the car seats about seven), or it that just asking for an explosion?
oops. wikipedia says that the cars were made up until 2003, not 2000. my bad.
Starbucks and Shinsegae have a joint venture here. It’s not a pure franchise operation. Joint ventures, although painful to the extreme, are perhaps recommendable because without a strong local partner the foreign brand can expect a freeze-out. Adding Shinsegae staff to the team means that the weight of Shinsegae gets thrown behind the business when seeking property, hiring initial staff, etc. The reverse of this all the difficulty of doing business in Korea gets distilled down into internal struggle over control of the joint venture company. Six of one, half-a-dozen of the other: It’s hard doing business here.
Michael, wine from Chile is *so* marked up here (in Korea) that it is obscene. I have never seen that Montes Alpha wine sell for less than 38,000 a bottle, in fact, when I was last in Tokyo, I bought a bottle for ~20,000 won, simply because it was so much cheaper in Japan.
Everything (including legal services) is marked-up quite considerably here in Korea. The major cost component is Korea’s love of artificial limits on supply of whatever component you want — people (i.e. the Bar Exam) or real estate (limited rights to build and re-build as required).
Considering that the LPG tank is probably the most durable, heavy-duty part of the car, and the typical LPG line in a car has an emergency cutoff, I would say no. Of course, I’m no expert on the matter, but these guys are (PDF warning).
Check this out–I had no idea how overpriced Chilean wine was until I saw that Tesco sells AN ENTIRE CASE (six bottles) for what we pay for one bottle in Korea.
http://www.tesco.com/winestore.....p;Nr=70002
Mr. Carr, they’re getting around real estate contraints somehow (hmm, bribery maybe?) judging by the dozens of high-rises going up in Seoul right now. There’s going to be a very loud pop when the speculation bubble bursts.
jd,
I bought a new SM5 back in 2002 and it’s one of the best (new) cars I’ve ever owned. So far, I haven’t had one single problem with it. I get between 27 & 30 miles to the gallon - and that’s a combination of city and country road driving.
Everyone knows Koreans make nothing but crap. Whatever they touch is crap. If you want quality, buy Japanese. Japanese people make the best products, not some soju filling, barfing/farting/spitting drunk ajoshi from Ulsan who has no ideal about Japanese quality detail.
The speculation bubble in Seoul is confined mostly to Kangnam due to the schools issue. And frankly, I think Koreans with money will pay any price to get into this neighborhood, just as they will pay any price to get their kids into a foreign school. Outside Kangnam, Seoul real estate is flat, flat, flat. There are alarming inventories of unsold apartments outside Seoul, particularly in provincial areas remote from this metropolitan area, as the population flees to Seoul.
“Everyone knows Koreans make nothing but crap.”
Hey, come on, cm. I drive a Hyundai Sonata 3 and I really like it. In fact I like it so much, I will probably buy a Korean car when I go back to Canada (they are a good deal cheaper than the Japanese ones). I had a Japanese car before I came to Korea, and it was great, but the prices started to skyrocket in the ’90s and I figure I could get a pretty decent Korean car for a much better price tag once I return.
More than happy with my Gentra so far! First new car I have ever owned too…73 Nova…66 Mustang…88 4×4 bush fitted Ranger…
Damn
I must be getting old. I am happy with my Gentra.
Fellas, I was just joking before some troll inevitably shows up to post that same old stereotype.
I’m not an expert of auto industry but here are some of food for thought.
1) When some Korean experts say Korean auto industry is not as competitive, they probaly are using scare tactics. But there is also some truth to this notion if you regard the fact that Japanese manufacturers like Honda and Toyota (and their auto parts industry) have manufacturing facilities in the US. Under the FTA, Korea will have to import Hondas and Toyotas and Japanese designed auto parts made in the USA. Maybe what they’re afraid of is not the US auto industry which is in serious trouble. Maybe they are afraid of the Japanese.
2) For the life of me I just cannot understand why the US auto industry is dead set against the FTA with Korea. They’ve complained for decades about the Korean levies against imports. Here’s the perfect chance to eliminate Korea’s 8% tax to 0%, while Korea’s only gaining 2.5%. Plus, Hyundai is already making cars in the US, the FTA to them would not make that much of a difference, while it would make a huge difference to American car companies who are exporting to Korea. So why the anti-FTA stance? Could it be that they are afraid to compete, with no more excuses as to why they can’t compete? I say so.
cm> To deal with your points.
1. Acording to some of the intial talks, Japanese made production in the US will likely not be counted as a US export to Korea.
2. I have not heard anti-FTA complaints from the US auto co’s. However some complaints have been voiced by politicians and Unions in the US.
Dram_man, read this part from what you quoted:
Two senators from “Michigan” (meaning Detroit). They would not voice their opposition if there is no significant opposition to the FTA from the US auto industry and their unions. Or are they really going against their voting/lobbying constituency (which I doubt)?
Have to remember that in addition to the basic tariff on imported cars there are the additional taxes, such as those based on engine capacity, that are tacked on. And there’s a bunch of them. Anything more than 2000cc gets nailed; most US cars are more than 2000cc. And these taxes are also “taxed” as each additional tax is added to the value at which the next tax is computed–similar to the foreign restaurant’s 10% service charge is included to compute the 10% VAT. I recall the Koreans are dead set against any changes to these supplemental taxes. The US has a “gas guzzler” tax that penalizes those cars with poor gas mileage plus local sales tax. Could be a reason for the US automotive industries’ displeasure with the FTA.
Dram_Man could detail all of this.
The main hassle owning a foreign car here is the lack of service centers, particulary independent service centers. And if you need a part that isn’t in country be prepared to wait several weeks. But labor, even at the dealer, is quite affordable vis a vis the US.
Seouldout> Ask and you shall recive. From the most recent USTR report on trade barriers in Korea (note report seperate of the FTA talks):
Canadian auto industry is also up and arms over the FTA with South Korea. They (who piggy back on US auto industry) are dead set against Canada’s FTA with South Korea.
It looks as though it’s not only the Koreans who are distorting the facts about the FTA.
http://www.bilaterals.org/arti.....ticle=5001
And here I thought, this is what FTA is all about - eliminating tarrifs.
No, that’s not exactly true. Whole industry will dissappear if you fail to compete. And as long as companies like GM and Ford are saddled with welfare of their former workers and militant unions that won’t take no for an answer, they will continue to struggle - FTA with South Korea or no FTA.
Please somebody tell this guy that South Koreans don’t get $5 an hour and that it’s Korea, not “China” that they’re negotiating FTA with.
And this is not even half as ignorant as some of the remarks I’ve read.
You people actually drink wine?
Dram_Man, thanks.
Origami, yep. ‘Bout a case a month.
I’m sorry, but this just does not make any sense for Korea to do so. 100% of oil is imported, therefore ROK government should be encouraging conservations through heavy taxation on a user basis. Frankly, I like the ideal “you can buy a bigger car, but you better be prepared to pay the tax on it because you can afford to”.
The theory that higher taxes on bigger engine displacement is discriminating against and hurting American car imports goes out the window when the facts are in that German and Japanese cars with huge engine displacements are doing far better then American cars, and that eliminating the engine tax will only fuel the growth of German and Japanese luxury makers, while making little difference to American makers. Another fact, Korean car makers also make many models that have bigger then 2000CC engines - so they are also under the same engine displacement tax.
It absolutely makes no sense to me why the US should push the elimination of this particular tax in Korea, when they should be learning to do the same for the US market - particularly at a time when America is ever so more reliant on foreign oil with skyrocketing prices. America can also get around this particular tax and export smaller cars to Korea.
The engine-displacement tax is stupid. It produces the predictable car: Giant bloatmobile with a wind-up engine too small for the car. Then the tiny engine straining against the weight of the car eats up gas.
Make the tax an fuel economy-based tax and then we’ll be on a level playing field. The size of the engine is B.S. — the key question is how much gas it gobbles. Korean cars are extremely inefficient with fuel, and I think it’s a result of the displacement tax putting dinky engines into the giant cars Koreans want to drive.
Korean cars are plenty good enough to remain dominant if the market opens.
some energy statistics
World Primary Energy Consumption 2004
World Total: 446 Quadrillion Btu
United States: 100.41 Quadrillion Btu
source:
http://www.eia.doe.gov/emeu/ae.....ec11_7.pdf
united states transportation sector energy consumption 2004
27.951 Quadrillion Btu
source: http://www.eia.doe.gov/emeu/ae.....sec2_8.pdf
Primary energy consumption of other countries (in quadrillion Btu) 2004
http://www.eia.doe.gov/emeu/ae.....ec11_7.pdf
Mexico 6.61
Germay 14.69
Spain 6.4
United Kingdom 10.04
Russia 30.06
Egypt 2.52
South Africa 5.12
China 59.57
India 15.42
Japan 22.62
South Korea 8.99
The transportation sector consumption of the us is roughly half of the TOTAL energy consumption of China
fuel rate data (mpg) united states 2004
http://www.eia.doe.gov/emeu/ae.....ec2_23.pdf
Passenger cars 22.4
vans, pickups, suvs 16.2
Trucks 6.7
retail motor gasoline prices 2005 in USD
http://www.eia.doe.gov/emeu/ae.....c11_17.pdf
Australia 3.23
Canada 2.87
Germany 5.60
Japan 4.28
Mexico 2.22
South Korea 5.28
Taiwan 2.79
United States 2.30
Leo> I call “bullshit” to your entire post. Anybody worth their salt will tell you its not the total amount used its effiency of the use that counts.
Of course the US BTU usage is high, its one of the highest in the world in population and GDP. Add to that as well the consumption used for travel. So again of course the US uses more, the country is lot bigger.
Finaly the retail price of gas shows nothing given most of that price is in tax. Additionaly I note the omission of countries, such as China, that subisize the price of gasoline.
Koreans have long been doubted the quality of Hundais sold in Korea versus Hundais sold outside Korea. Many Korean companies send the “good stuff” overseas while putting out garbages for internal consumption. Some metal parts and engines may be of different quality.
American cars such as GM or Ford will be purchased by Korean taxi drivers because they want more protection in collision event. Some wealthy Koreans will buy Hummers for his wife and children. It could easily become the status thing.
Guess, Korean cars (Hyunday or Kia) don’t lack in quality,butin style and image. Nobody with status wants to buy a sedan or SUV which lacks the quality and brand credentials of e.g. German cars. Japanese automakers did a great job to introduce high-standard luxury brands like Lexus, Acura and Infiniti to substitute for their image lacking basic brands like Toyota, Honda and Nissan.And they’re engaged in Formula I motorsports, which is a good image transfer for their rather bland compact cars and sub-compact models with tiny, tiny laughingstocks of motors but a subtile “grand image”-attachment of a Formula I-supplier. Korean cars look only dull and without any exciting attachment of brand image. From a financial cost-benefit point of view they’re rather a good buy, but emotionally they lack status.
Hyundai
Baduk (51): Chevy Caprice, Crown Vic? Don’t recall seeing any, or would they taxi owners go for smaller models? Having been around taxis most of my life, I would’ve recognized an American-model cab in Korea.
One of the first times I was in Korea, we were getting a lift from a relative along the 강변도로 or whatever it’s called along the north side of the Han River. Evening rush hour, suffering from jet lag. We passed a cab (the black ones with the gold checkerboard stripe) with very similar livery to some cabs back where I come from in North America. For a split second, I thought (or would have thought, had the idea made it into words before I regained a grip on reality), “Wow, Vancouver to Seoul…how did he get here? That’s a great fare!”
Mercury Sables were considered a luxury car in Korea not too long ago, were they not?
Many taxi drivers worry about getting killed in a collision accident. They know Korean cars, Hyundai and Kia, are not well fortified in term of steel thickness. One of them told me “I am driving a beer can”.
Many of them will be interested in the US make because they know American cars use lots of steel.
Oh, I get it: you mean if FTA goes through. Well, considering that endless exposure to heavy traffic in any major city—especially a place like Seoul—is an occupational hazard, I’d understand. That’d be so weird (because it’d be so familiar), seeing taxis like that some day in Korea!
BJ, you’re the epitome of everything that is wrong with the stereotypical hypocrite kyopo.
Quote from Fast and the Furious: Tokyo Drift…
Han: The Red Evo’s yours
Shawn Boswell: What do you mean?
Han: You’re representing me now. What, you think I’m gonna let roll in a Hyundai?
“One of them told me “I am driving a beer can”.”
Now that is funny, Baduk.