Strong yen takes heavy toll on Honda, Toyota in S. Korea

SEOUL, March 9 (Yonhap) -- The Japanese currency's sharp rise against the South
Korean won has taken a heavy toll on Honda Motor Co. and Toyota Motor Corp. in
South Korea's import market, an industry group said Monday.
A strong yen, which has advanced nearly 40 percent against the South Korean
currency so far this year, makes Japanese vehicles more expensive in South Korea
and reduces the value of won-denominated profits when converted into the yen.
The combined market share in South Korea for four Japanese brands -- Honda,
Toyota's Lexus, Nissan Motor Co. and Mitsubishi Motors Corp. -- plunged to 21.3
percent in February, compared with 31.5 percent in January, according to the
Korea Automobile Importers and Distributors Association.
Honda has been the hardest hit, with sales diving to 228 units last month from
the 666 units it sold in January.
The automaker, which ranked as the most popular brand in South Korea last year,
hiked its vehicle prices here by an average 13.85 percent last month, the second
increase so far this year.
"Profitability continues to worsen because of the strong yen," an official at
Honda Korea said at that time. "So, the additional price-hike was unavoidable."
Mitsubishi, which began selling its vehicles in South Korea late last year, has
sold only 39 cars so far this year.
Data showed that German brands were benefiting from the pain of Japanese carmakers.
In February, Germany's BMW AG topped sales of imports for the month with 606
units sold, followed by Audi with 495 units and Mercedes-Benz with 487 units.
Sales of imported cars in South Korea dropped 19.9 percent last month to 3,663
units as the South Korean economy was hit by weaker consumption and tight credit,
the association said last week.
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