By Park Ju-hong
There is growing interest in environmentally friendly vehicles worldwide. Manufacturers at both ends of the market, from premium brands such as Mercedes Benz and BMW, to Chinese automakers, are developing eco-friendly cars.
The public and private sectors of South Korea, the world’s sixth largest producer of automobiles, are promoting eco-friendly automobiles.
According to the automobile management information system operated by the Ministry of Land, Transport and Maritime Affairs, the number of registered cars in Korea exceeded 22 million this year. Hybrid, electric, and hydrogen cars are classified as eco-friendly vehicles. The number of registered eco-friendly cars is steadily increasing. According to data for June 2018, about 355,871 hybrid, 36,835 electric, and 358 hydrogen cars were registered, accounting for 1.7 percent of all registered automobiles.
Although eco-friendly cars are about 1.5-2 times more expensive than comparable gasoline-fueled vehicles, the penetration rate is increasing every year with the advantages afforded by the government’s subsidy policy and low maintenance costs.
Under the Special Act On The Improvement Of Air Quality In Seoul Metropolitan Area, vehicle manufacturers with sales above a certain level are required to sell a minimum percentage quota of low emission vehicles.
As a result of these regulations, Audi recently sold 3,000 units of its A3 model of low emission automobiles at a low price.
In addition, for electric and hybrid cars, the national and local governments provide substantial subsidies. In the case of electric cars in particular, there are areas where subsidies of more than 20 million won are available.
In the case of foreign brands, it is believed that some dealers are engaged in questionable sales activities, such as registering cars in regions other than their actual location in order to receive higher subsidies and thereby lure more customers.
Korea is a major energy importer and automobile producer. The government should be supported in its efforts to reduce energy imports while not losing its position in the global automobile market.
It is also necessary for Korean domestic and import dealers to review Korean legislation and use it to maximize sales. However, since the application of the statute is complicated and there are many exceptions, it is a good idea to make decisions with the help of legal experts.
Park Ju-hong works for HMP Law as a lawyer. His major field is finance and the Fourth Industrial Revolution technology. The thoughts expressed in this column do not necessary reflect those of HMP Law.