The Korea Automobile Manufacturers Association announced on March 24 that the Korean automakers’ market share in Canada dropped from 12.6 percent and 12 percent to 11.2 percent between 2012 and 2014, whereas Japanese carmakers increased their share from 32.6 percent to 33.8 percent during the same period.
Cars are one of Korea’s major export items in its trade with Canada. Korea’s total exports to Canada amounted to US$2.23 billion in 2013 and vehicles accounted for 42.8 percent of it. In 2013, the Hyundai Motor Group took up 12 percent of the Canadian car market while Ford, Chrysler, and GM represented 16.2 percent, 14.9 percent, and 13.3 percent, respectively. They were followed by Toyota (11.2 percent) and Honda (9.4 percent).
In the meantime, the tariffs imposed on the Korean cars exported to Canada will be reduced from 6.1 percent to 4.1 percent this year, to 2 percent in 2016, and to 0 percent in 2017 according to the Korea-Canada FTA.
As of now, Korea is the only Asian country that has signed a free trade agreement with Canada. It is expected that the tariff elimination and the subsequent price cut will counter the Japanese carmakers’ low-price policy based on the weak yen.