South Korea is a very popular destination for expatriates, but their cars are also enjoyed by locals in the USA and around the globe. Anyone who has lived in Korea knows it is a progressive country that strives to become the best in every field of activity. The automotive industry is no exception. Over the past decades, the industry has undergone significant positive changes, thanks to which many Korean automakers have significantly improved their ratings and become more popular.
This has increased competition in the Central American automobile market and created the basis for the emergence of new influential players in it. The market is changing, and Korean cars are challenging American manufacturers.
The changing Car Market for Expats
Automakers from South Korea broadly look up to their Japanese colleagues, who, in the 70s of the last century, managed to create a real miracle and displace the Big Detroit Three from their leading positions in Central America. However, what worked 50 years ago does not work today. The reason for this was global changes in the automotive market. When Honda, Nissan, and Toyota rose to the top, they offered economical and low-maintenance models. These cars were the only option for many, so due to the lack of alternatives, people bought what they could afford. Today, the situation has changed dramatically. Almost every American manufacturer has inexpensive vehicles designed for people with limited financial resources. They distract the attention of even people most interested in buying Korean cars and force them to consider all available options.
Another significant development that changed the Central American automobile market was the improvement in the quality of vehicles sold. If only the Americans and Japanese had offered perfect models previously, today, they are joined by the Germans, British, Italians, French, and Swedes.
The Koreans are also included in this list, but they will not be able to surpass all their competitors regarding the quality of the cars they produce. In this regard, one should not expect a significant increase in sales volumes shortly. In addition, it is essential to note that the cost of models from South Korea is not much different from the price of Japanese and some American cars. This trend is typical for new and used vehicles sold at Kia and Hyundai auctions. Koreans will also not be able to win the attention of expats living in Central America, where motorists may be attracted to the lower price of their products.
Two Against the Crowd – Top Korean Car Brands for Expatriates
The two top South Korean brands for expatriates and local nationals are Hyundai and Kia. They offer customers high-quality and relatively inexpensive cars that everyone can afford. However, the choice of available options is not as large as that of Americans. The latter include Ford, Jeep, Dodge, Chevrolet, Tesla, GMC, Ram and other companies, each of which can offer as many models as Hyundai and Kia combined. Because of this, a so-called crowd effect is created, which absorbs individuals who want to challenge them. Of course, they will not be able to completely oust the Koreans from the Central American automobile market. However, expat car buyers should not expect serious problems associated with the presence of Hyundai and Kia.
Commitment to Tradition
Many global citizens choose a car manufacturer based on decades of tradition, and because of this, families whose ancestors have always driven American Ford, Dodge, and Chevrolet also choose models of these brands. This approach is common in various countries of Central America, which is why Korean manufacturers have little chance of displacing cars from the United States. Nevertheless, the possibility of a positive outcome for Hyundai and Kia still exists. To do this, Korean manufacturers must offer consumers something new and unique that would be foolish to refuse.
The same situation is observed with models from Japanese and European manufacturers. People who have already appreciated all the advantages of a car of a particular brand are unlikely to want to make drastic changes and change from a well-known vehicle to a mysterious Hyundai or Kia. Even if the future models from South Korea become more prevalent in Central America, they will not be able to become full-fledged competitors to such giants of the American automobile industry as Ford, Dodge, Chevrolet, and Jeep. The same long-term love motorists can easily explain this have for a particular brand from the USA.
Unsuccessful examples from the past
The activities of Nissan, Toyota and Honda are examples of successful entry into the Central American automobile market. These manufacturers could supplant long-standing American leaders and remain at the top of the popularity ratings. However, this example is instead an exception to the general rule. In addition to the listed giants of the global automotive industry, other Asian companies also tried to win the attention of Central Americans. Note that well-known manufacturers such as Mitsubishi, Mazda, Subaru, and Suzuki could gain only a small market share.
Today, the number of expats who are fans of Hyundai and Kia fans is increasing. However, the growth in demand for these cars in North America is negligible. If they somehow combine their efforts, the chances will become a little higher, but even in this case, they will not yet constitute real competition for the American Chevrolet and Ford. Some say that Korean automakers will gradually lure away customers from other Asian companies who will leave the Central American market for one reason or another. This scenario is unlikely, so Hyundai and Kia should not rely on it alone.
Hope for Electric Cars – An Expat Perspective
The environmental situation in the world is worsening every year, so measures are already being taken to address climate change and expats living abroad do want to adopt electric vehicles to help the environment. Because of this, many expat destination countries have introduced various laws and severe restrictions on fuel-powered vehicles. Such actions aim to gradually force people to switch to environmentally friendly transport that will not harm the environment. This is where Hyundai and Kia’s main chance lies. If both companies can offer Central American buyers high-quality and inexpensive hybrids or electric cars, the likelihood of increasing sales volumes will become more realistic.
Today, Korean manufacturers supply models with different types of engines to Central American countries. Despite all attempts to wean people away from petrol and diesel cars, they remain the top sellers of Hyundai and Kia. If we compare data from 2022 and 2023, sales volumes of fuel models from both companies have increased significantly. At the same time, the number of exported hybrid vehicles and electric cars has decreased dramatically. The same is expected in 2024 and 2025.
This trend will force the Koreans to continue to sell mainly fuel-powered models to Central Americans, which may be banned entirely at one point. Most likely, this erroneous decision will end the chances of Hyundai and Kia competing with American manufacturers, each of which has already begun the process of switching to producing environmentally friendly cars.
Some Final Thoughts for Expat Car Buyers
South Korean cars combine quality, affordability and unsurpassed Asian style. They are good in almost everything, from appearance to performance. Nevertheless, they face severe competitors from Japan and the United States in Central America and are still losing to most of them. In the future, the situation is unlikely to change dramatically, so, most likely, Hyundai and Kia will not be able to create serious problems for American companies. They will only remain a backup option for most motorists and will be able to capture no more than 10% of the Central American automobile market.
