Genesis beats BMW to rival Mercedes in Korea's premium segment

In South Korea, esteemed German auto brands BMW and Mercedes-Benz have for years been the top two brands vying for the hearts of luxury car buyers, who typically pass over local brands such as Hyundai Motor Co. or Kia Corp.

On Tuesday, however, some industry survey results surprised those who see only foreign brands as status symbols. Hyundai’s premium brand Genesis beat BMW to join Mercedes-Benz as the top two luxury car brands buyers compare at the point of purchase.

According to an annual survey by ConsumerInsight, a Korean research firm, the Genesis lineup and market leader Mercedes-Benz emerged as the matchup most considered when making luxury car purchases.

ConsumerInsight’s latest survey of 1,375 premium car buyers from July 2022 to June 2023 showed that 14.7% of respondents said they agonize over whether to buy a Mercedes or a Genesis, meaning nearly 15 out of 100 new luxury car buyers are torn between the two before their final decision.

The choice between Mercedes and BMW came in second with 13.2%, followed by Genesis-BMW (9.9%), Genesis-Volvo (4%) and Genesis-Audi (3.4%).

“For years, when Koreans would think of buying a new luxury car, longstanding names such as Mercedes-Benz, BMW, Audi and Volvo would first come to mind. Now, they think of Genesis cars as pretty strong alternatives to such brands,” said a ConsumerInsight official.

BMW OVER MERCEDES AMONG IMPORTED VEHICLES

Among imported luxury vehicles, BMW was buyers' top pick, coming in ahead of Mercedes-Benz, with a final choice ratio of 53-47 between the two, the survey showed.

According to the Korea Automobile Importers & Distributors Association (KAIDA), BMW sold 77,395 vehicles in 2023 to overtake Mercedes-Benz. BMW regained the top spot in Korea’s foreign automobile sales for the first time in eight years.

Mercedes lost ground to BMW all through last year despite its attempt to turn the tables with aggressive year-end discounts. It was dethroned by BMW with annual sales of 76,697 units.

Last December, Mercedes-Benz Korea said it is bringing its latest flagship model, the 2024 E-Class sedan, to Korea to continue its strong sales seen in past years.

The E-Class has been dubbed the “Gangnam Sonata” in Korea, as it is the most common sedan sold in the upper-class district of Gangnam, in southern Seoul. The Sonata is Hyundai Motor’s top-selling sedan.

AUDI CONTINUES TO LOSE GROUND

Latest KAIDA data showed BMW beat the world’s No. 1 electric vehicle seller Tesla Inc. to become the top imported EV seller in Korea thanks to its diverse lineup of new EV models.

BMW sells 11 EV models in Korea, far more than Tesla’s four.

Last October, BMW Group premiered its fully revamped eighth-generation 5 Series sedan in Korea – an indication of the growing importance of the Asian country in the luxury segment.

Audi, another German luxury brand, has steadily lost its ground in Korea.

The latest ConsumerInsight survey showed only 3.4% of new luxury car buyers chose between Audi and Genesis for their final purchase.

Audi’s Korean market share fell to 4.8% in 2023, down from 8.9% in the previous year.

Analysts said the rise of Genesis as the top candidate for new premium car purchases in Korea is partly due to its price competitiveness and the aging of its foreign competitive models.

“Genesis is solidifying its position as Korea’s sole premium brand. However, it remains to be seen if the uptrend will continue as Genesis doesn’t have a new flagship model scheduled to roll out this year,” said an executive at ConsumerInsight.

Write to Jae-Fu Kim at hu@hankyung.com

In-Soo Nam edited this article.