Audi Volkswagen Increase Prices in Korea

kpopluv, Jan. 2, 2015, 10:36 a.m.

German carmakers Audi and Volkswagen raised prices in Korea on Thursday by an average of 2 percent and 0.5 percent.  The carmakers claim the increase reflects rising consumer prices. The two carmakers raised the prices of popular models even more. Volkswagen put up the price of its flagship Golf 2.0 TDI BlueMotion by W900,000, or 2.7 percent to W34.3 million (US$1=W1,090). The Passat 2.0 TDI mid-sized sedan became W800,000 or 2.1 percent more expensive at W39.7 million. 

Audi hiked the prices of its A4 3.0 TDI and A4 35 TDI Quattro by W500,000 to W800,000 (1.1 and 1.6 percent).  Consumer groups complain that automakers are pocketing the benefits of free trade agreements that should go to consumers.  Under the Korea-U.S. free trade agreement, taxes on cars with 2,000 cc or larger engines, which was included in the price regardless of producing country, was reduced by 1 percent from the first day of the new year. That means cars should become cheaper. 

Instead, the price of the Volkswagen Phaeton with a 3,000 cc engine went up by 2.2 percent from W85.5 million to W87.4 million.  And for the Audi A7 55 TDI, prices rose by a modest 0.3 to 0.5 percent, but including the tax reduction the increase is in fact substantial.  The two German brands enjoyed their best year in Korea in 2014. They sold about 53,700 cars from January to November, up 27 percent on-year, and accounted for 30 percent of the market.  As a result they evidently feel confident they can get away with increasing their prices.

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