According to recent research, sales of Bentley, Porsche, and Rolls-Royce vehicles have plummeted in Korea, and this decline has nothing to do with drivers’ inability to pay for them. The implementation of mandatory green license plates for corporate vehicles is the true cause. According to the Korea Times, the Ministry of Land, Infrastructure, and Transport of the nation implemented the regulation at the start of this year in an effort to discourage business owners from using supercars as corporate vehicles in order to evade paying taxes.
It mandates that all business automobiles costing more than 80 million won ($57,800) have unique green license plates that set them apart from privately owned cars. Additionally, it appears that the idea of everyone knowing they are driving a luxury automobile that is not really theirs and that they are drawing attention from the tax man deters consumers.
New Regulations Impact the Luxury Car Market in Korea
Under the previous arrangement, Korean business owners who bought automobiles for their families could register them as corporate vehicles and avoid paying as much tax as they would have if they had bought them privately. But since all corporate vehicles are now prominently marked, if the vehicles are utilized for personal travel, those kinds of maneuvers will be painfully obvious.
Sales of exotic and premium vehicles have been significantly impacted. According to the Korea Times, Bentley registrations fell by 77% in Korea during the first three months of 2024 compared to the same time the previous year. Rolls-Royce and Porsche had decreases of 35% and 23%, respectively. Sales of Lamborghinis fell by 22% in Korea between January and March (albeit they increased worldwide), while Rolls-Royce registrations decreased by 13% during that same time frame.
Journalists from KT were informed by an unidentified luxury automaker’s representative;
“Generally speaking, few customers or business owners prefer to purchase vehicles with green plates due to the prevalent negative image on rental and lease cars. This will weaken the overall sentiment from business owners who plan to purchase luxury cars as fleet vehicles.”
Decline in Luxury Fleet Sales Amidst Shifting Economic Landscape
According to Korea Times, company-owned vehicles made up 40% of all registrations last year but are currently just 28% of all registrations, marking the first time this percentage has fallen below 30%. However, several manufacturers attribute the decline in luxury sales to basic economic causes.
According to data from the Korea Automobile Importers and Distributors Association, a staggering 90% of Lamborghinis sold in Korea last year, along with 87.3 percent of Rolls-Royces, 76% of Bentleys, and 61.1 percent of Porsches, were registered as fleet cars. Sales of imported luxury cars decreased 31.4% in March 2024 compared to the same month the previous year. Out of 25,263 imported car sales, 3868 were accounted for by them. Although the total amount of imported cars sold increased by 6%, company-owned vehicles accounted for just 28.4% of the total, which is apparently the first time this has happened and far less than the 40% number from the previous year.
