Korean cars have made major inroads into the European market after a trade deal was made that would phase out import tariffs on cars over the next four years, the Wall Street Journal reports.
South Korean auto giants Hyundai and Kia have seen a sharp rise in exports since July 2011. According to Seoul’s customs agency, South Korean exports to the EU between July 2011 and May 2012 increased 40% from the same period the previous year, to 400,000 cars. EU exports to South Korea, on the other hand, rose 13% to 73,000 cars.
European car manufacturers told the Journal that the trade deal may not be the only factor that has led to the large shift in trade. Besides the tariff cuts on South Korean car imports, sales rose due to the weak South Korean currency. European exports are also held back by automotive non-tariff barriers such as emissions, safety and other regulations.