Fuji Heavy Industries executive vice president Masatsugu Nagato (right) and Subaru Korea CEO Choi Seung-dal pose with the Legacy mid-size sedan at a press conference in Seoul on Thursday. /Newsis
A bit of news that is slightly surprising. Subaru seems to have never officially sold cars in South Korea before this.
"Tokyo, January 21, 2010 – Fuji Heavy Industries Ltd. (FHI), the manufacturer of Subaru automobiles, today announces that sales of Subaru-brand vehicles will start from April in South Korea working through its local distributor, Subaru Korea Co., Ltd.
The imported car market is currently stable growing in the South Korean automobile market. Especially the categories of mid-size sedan and compact SUV, that the Subaru’s product range fits well, rise in popularity. Furthermore Subaru’s authentic driving performance and all-round safety by its unique Symmetrical All-Wheel Drive system will appeal to the Korean market, where mountains are spread nationwide and the temperature range is larger throughout the year. By offering Subaru’s uniqueness, FHI will establish and increase penetration of the Subaru brand in the market.
Starting on April 2010, the available models are the LEGACY, OUTBACK and FORESTER. Subaru Korea has set an initial sales target of 600 units in the first year and aims to increase that number to 3,000 units by 2015. Subaru Korea is in the process of developing its own dealer network and scheduled to open Subaru outlet in Seoul and Pusan at first then expands to the other metropolitan areas in South Korea."
Why do I think that this bit of news is surprising? Its because a company like Subaru took so long to set up its business in a country that is practically its closest neighbour. An answer may be found in the statement below:
"We delayed entering the Korean market due to the market dominance of Hyundai Motor and Kia Motors," Fuji Heavy Industries executive vice president Masatsugu Nagato said in a press interview Thursday. "But with the imported car market expanding in Korea, we believe there is an opportunity for Subaru."
I always thought Subaru, which are considered to be a mature car manufacturer (albeit small in size compared to Toyota, Nissan, Honda) to have their presence on all of the major automotive markets. South Korea in my opinion was deemed to be a large enough market for any car manufacturer to tap into. It seemed surprising that with the worldwide fame of the Impreza, Legacy and even the Forester, especially with the World Rally participation in the 1990s Subaru did not push to sell and market their cars in one of the world's known automotive markets. I suppose brand loyalty and the nationalistic spirit of the Koreans who prefer locally made cars to imports may have scared or stifled any previous attempts to conquer the South Korean market. It's either those two reasons or protectionism of the South Korean automotive market. Excise Duty and Taxes, somewhat like those imposed in Malaysia to protect local produce could be the main reason Subaru chose to wait this long to enter the South Korean market.
Even now, if you took a proper look at the report above, they are not releasing the Impreza in their initial line-up but the more premium models in their stable. Could it be said that Subaru missed the marketing boat? Especially since they've pulled out of rallying. Would they have done better if they entered the South Korean automobile market in the early 1990s when Korean cars were still basically thought of as rubbish? Very surprising indeed.