Korea levies vehicle taxes and usage fees based on engine size. Until the last few years, tax rates increased rapidly as engine size increased. The Korean government figured (reasonably, I think) that a Korean who could afford a large, powerful vehicle could also afford to pay more tax, and that he or she should pay some of the social costs of bigger vehicles (pollution, traffic congestion, more - yes, more - death and injury from accidents). Not surprisingly, Korea's most popular vehicles were tiny cars such as the Daewoo Tico and Kia Pride (if you live in the US you may know the Pride - it used to be sold here as the Ford Festiva).
However, in 1999, these rates were "flattened." No doubht there was some lobbying for this by the Korean auto industry. But it's clear that plenty of the lobbying came from outside Korea -- specifically, from the US Trade Negotiator's Office.
The US government's aim was to open Korea's markets to larger US-built vehicles, by making large vehicles more affordable for Koreans. It was partly successful. Thanks to the lower taxes, cheaper fuel, Western influence, and Korea's fiscal recovery, the number of SUVs on Korea's roads jumped 80 percent from 1999 to 2000, to over 251,000. Sales of small cars dropped.
The MOA did succeed in getting more SUVs and minivans on Korean roads. But they're not Fords, Chevrolets, and Jeeps. Almost all of them wear Hyundai, Kia, Daewoo, and Ssangyong badges.
However, in 1999, these rates were "flattened." No doubht there was some lobbying for this by the Korean auto industry. But it's clear that plenty of the lobbying came from outside Korea -- specifically, from the US Trade Negotiator's Office.
The US government's aim was to open Korea's markets to larger US-built vehicles, by making large vehicles more affordable for Koreans. It was partly successful. Thanks to the lower taxes, cheaper fuel, Western influence, and Korea's fiscal recovery, the number of SUVs on Korea's roads jumped 80 percent from 1999 to 2000, to over 251,000. Sales of small cars dropped.
The MOA did succeed in getting more SUVs and minivans on Korean roads. But they're not Fords, Chevrolets, and Jeeps. Almost all of them wear Hyundai, Kia, Daewoo, and Ssangyong badges.