France mulls restrictions on South Korean car imports
It’s common knowledge that Europe is in the midst of a massive economic downturn that has hit the auto industry particularly hard.
Despite that fact, South Korean car sales (Hyundai sales in particular) in Europe are through the roof and that is causing some concern in France.
Korean cars delivered a 24% increase in sales last year alone, even while the rest of the auto market tailed off significantly.
French automakers PSA Peugeot Citroën had an especially rough year and have announced plans to lay off 8,000 employees.
The upshot of those numbers is that France has sent a formal request to the EU commission to monitor the export of South Korean vehicles. Many industry experts believe that this is the first step in bringing back tariffs a mere year after the free-trade agreement with the Koreans came into effect.
EU Trade Spokesman John Clancy released a statement confirming that the French authorities have indeed submitted a request for surveillance measures on South Korean car imports.
He went on to say that the Commission was carefully reviewing the request.
If the EU decides to accept the request from France, it will mean that local automakers would be able to get their hands on detailed information regarding imports from South Korea.
That would include the number of products, as well as the type that were due for export. This could also mean that the EU Commission might decide to scrap the previously agreed upon free-trade agreement, leaving European countries the option to impose protectionist restrictions on all imports from South Korea.
Hyundai, Kia cars from Europe
It’s worth noting though that despite the fact that the number of South Korean exports grew by 40% (345,000 units) since the signing of the free-trade deal last July, that number still falls well short of the 640,000 units that were imported in 2007.
That comes down to the fact that South Korean automakers such as Kia and Hyundai have actually switched much of their production to European production plants in Turkey, Slovakia and the Czech Republic.
Andreas Brozat, a spokesman for Hyundai claimed that the growth of sales in Europe is due in large part to the numbers of vehicles that are produced in that area.
He went on to say that of the 232,454 Hyundai cars registered in Europe, less than 12% were Korean made, with more than 70% of that number actually originating in Europe.