The introduction of a distinctive “lime green” license plate system for corporate vehicles earlier this year has led to a significant drop in the registration of high-end imported corporate cars in South Korea. (Image courtesy of Yonhap)
SEOUL, Mar. 14 (Korea Bizwire) – The introduction of a distinctive “lime green” license plate system for corporate vehicles earlier this year has led to a significant drop in the registration of high-end imported corporate cars in South Korea.
The rush by companies to purchase these vehicles before the new regulations took effect also appears to have influenced this decline.
According to the Korea Automobile Importers & Distributors Association (KAIDA), the number of imported corporate cars priced over 80 million won registered in February of this year was 3,551, a sharp decrease from the 4,793 vehicles registered in the same month last year, marking a decline of 1,242 vehicles.
The proportion of corporate cars within the same price range also saw a substantial reduction compared to last year.
Out of the 7,516 vehicles registered last month, corporate cars accounted for 47%, down 10 percentage points from last year’s 57% out of 8,455 total registrations.
BMW led the registrations among corporate cars priced above 80 million won last month, with 1,499 vehicles, followed by Mercedes-Benz with 1,206, Porsche with 375, and Land Rover with 133. The corporate car share for these four brands ranged between 45% to 57%.
Under the new regulations, corporate vehicles priced above 80 million won registered or re-registered from January onwards must display lime green license plates.
Failure to do so means the associated corporation cannot claim vehicle operation expenses or depreciation costs as deductible expenses. This rule exempts passenger cars priced below 80 million won.
The lime green plate initiative, aimed at preventing the private use of luxury cars registered or leased under corporate names for tax benefits, was one of President Yoon Suk-yeol’s campaign promises.
Before the system’s implementation last year, there was a surge in sales of luxury imported cars. According to KAIDA, sales of imported cars priced over 100 million won reached an all-time high of 78,208 units last year.
This spike was attributed to the government’s announcement of the exclusive corporate plate system and the decision not to retroactively apply it to existing vehicles, leading to a concentrated purchase of high-priced corporate cars.
As such, there are calls from some quarters for the lime green plate requirement to be extended to all existing passenger cars priced over 80 million won.
Kevin Lee (kevinlee@koreabizwire.com)
