South Koreans succumb to Tesla fever

From an eponymous cocktail to eager buyers following the shipping routes of long-awaited cars, Tesla Inc (TSLA.O) is having a moment in South Korea, particularly among tech-savvy professionals.

Kang Sung-mo, who runs an advertising production agency in Seoul, is a convert. “I am not interested in cars, but I am interested in the Tesla brand and its technology,” the 39-year-old told Reuters. Kang bought a Tesla Model 3 in December, ditching the Hyundai crossover he bought only last summer. Being associated with Tesla’s reputation for innovation was good for his image, he said.

The U.S. electric car maker had its best month for South Korea in June, selling 2,827 vehicles and bouncing back from weak sales in April and May which were hit by U.S. production disruptions due to the coronavirus. The Model 3 is now the country’s No.2 imported vehicle, ahead of the BMW 5 series and the Audi A6, and just behind the Mercedes E-Class. By contrast, Hyundai Motor Co (005380.KS), the dominant automaker in South Korea, saw sales of its Kona EV slump 31% in June to 2,513 vehicles.

Another 4,000 to 5,000 South Korean customers have the Model 3 on order, although most of them may have to wait until at least September for delivery, said a source familiar with the matter. The source was not authorised to speak to the media and declined to be identified. Tesla’s rising popularity among affluent professionals in South Korea, who have been relatively unscathed by the pandemic, is one of many feathers in its cap.

Highlighting the threat it poses to established brands, Tesla last week surpassed Toyota Motor Corp (7203.T) as the world’s most valuable automaker while its second-quarter deliveries smashed expectations at a time when sales at rivals have been laid low by the pandemic. South Korea’s generous subsidies of 12.43 million won ($10,380) for the Model 3 have definitely helped sales, bringing the car’s price down to less than $40,000.

Cars, a cocktail and a celebrity: South Koreans succumb to Tesla fever, Reuters, Jul 8