Audi is grappling with plummeting sales and the closure of several service centers in Seoul. (Image courtesy of Yonhap)
SEOUL, Sept. 5 (Korea Bizwire) – Audi, once a dominant player in South Korea’s imported car market, is facing a series of challenges that threaten its position in the country.
The German luxury automaker, previously part of the “Big Three” German premium brands alongside BMW and Mercedes-Benz, is grappling with plummeting sales and the closure of several service centers in Seoul.
According to industry sources on September 4, a large Audi dealership in Seoul’s Yeongdeungpo district ceased operations on September 1. The service center’s two entrances were found barricaded, effectively confirming its closure.
This follows the shutdown of another service center in Seocho earlier this year, with the Seongsu center expected to close in the first half of next year.
The trend extends beyond the capital. As of late December last year, Audi operated 40 service centers nationwide. By July this year, that number had dropped to 35, a reduction of five centers in just over six months.
This contraction in service infrastructure coincides with a sharp decline in Audi’s sales. Data from the Korea Automobile Importers & Distributors Association (KAIDA) shows that Audi’s new vehicle registrations from January to July this year totaled 4,524 units, a 59.4% decrease from the same period last year when 11,140 units were registered.
In July alone, Audi registered 921 vehicles, ranking seventh among imported car brands. This placed the company behind not only its traditional German rivals but also Volvo (1,411 units), Lexus (1,108 units), and Porsche (1,012 units).
Dealerships attribute this decline to what they describe as unrealistic sales targets set by Audi Korea last year. “Audi Korea set an unrealistic sales goal last year, imposing unreasonable quotas,” said one dealer, speaking on condition of anonymity.
“The flawed sales policy led dealerships into a ruinous discount competition, resulting in significant losses.”
Initially, Audi Korea set an annual sales target of 31,950 units for 2023, later revising it down to 21,500 units in September. However, the actual sales for the year reached only 17,868 units, with dealers estimating total losses at 116.3 billion won.
In response to these allegations, Audi Korea stated, “Sales targets are determined through mutual agreement, considering market conditions. We have conducted our business within the legal framework in the Korean market.”
Regarding the service center closures, they explained, “The closure of some centers is being pursued by the respective dealerships as a measure to improve management efficiency.”
Audi Korea maintains that its current network of 381 general repair work bays across the country is sufficient to service the approximately 185,000 Audi vehicles on South Korean roads. The company also claims to have the shortest customer wait times among top imported car brands at its service centers.
Kevin Lee (kevinlee@koreabizwire.com)
