The U.S. dollar is currently strong. As of September 29, 1 dollar is equivalent to 1,434 won, which is an increase of over 130 won from 1,295 won on July 1. The euro is also on the rise, now at 1,390 won, up from 1,344 won on September 1.
With the continually rising exchange rate, imported car brands are in a difficult position. As the dollar and euro increase, the amount spent by brands also grows significantly. However, they can’t simply sell at a loss. Is there a solution to this problem?
The most notable response is from BMW. BMW Korea accepts payments in won. By allowing payments in won, they can reduce exposure to volatile exchange rates and secure stable funding. BMW Korea stated, “By making payments in won, we can mitigate the risks associated with exchange rate fluctuations.”
Some brands are responding with price increases. Mercedes-Benz Korea has raised the prices of their U.S.-produced models, the GLE and GLS. The price of the GLE300d 4 MATIC increased from 101.6 million won to 100.95 million won, and the GLS400d 4MATIC went up from 141.6 million won to 152.9 million won.
Most automotive brands are currently maintaining that “there are no changes in prices.” Volvo Korea’s CEO, Lee Yun-mo, stated on the 27th at the new S60 and V60CC event, “Brand value and trust with customers come first. We will minimize price increases, even in the face of external factors like rising exchange rates and raw material prices.”
As the won-dollar exchange rate rises, domestic car brands that are expected to benefit from exports may not have everything bright. They still need to import major components. Therefore, if exchange rates rise, the cost of parts will also increase. This is why it’s not always a moment of joy when exchange rates go up.
Lee Sang-jin daedusj@autodiary.kr