The surprising reason luxury car sales have plunged in this country

Sales of high-end vehicles are down in South Korea this year, and garish green licence plates – newly mandated for company-registered vehicles – have been blamed for the drop.

The Korea Times reports sales of Bentley vehicles plunged there by 77.4 per cent in the first quarter of this year, compared with the same period last year.

Rolls-Royce sales were down 35.2 per cent, Lamborghini sales were down 22.2 per cent, and Porsche sales were down 22.9 per cent.

From the beginning of 2024, the Korean Ministry of Land, Infrastructure and Transport has required company cars valued at over 80 million won (A$90,129) to wear the new green number plates.

This has been blamed by some carmaker officials as the cause of the sales drop.

The rule was introduced by the government to stop business owners from purchasing high-end vehicles – intended for private use – as company vehicles to avoid taxes.

“Generally speaking, few customers or business owners prefer to purchase vehicles with green plates due to the prevalent negative image on rental and lease cars,” an official from an unspecified luxury carmaker told The Korea Times.

“This will weaken the overall sentiment from business owners who plan to purchase luxury cars as fleet vehicles.”

Data from the Korea Automobile Importers and Distributors Association shows 90 per cent of Lamborghinis sold in Korea last year were registered as fleet vehicles, along with 87.3 per cent of Rolls-Royces, 76 per cent of Bentleys, and 61.1 per cent of Porsches.

In March 2024, sales of luxury imported vehicles were down 31.4 per cent year on year.

They accounted for 3868 of a total of 25,263 imported vehicle sales. Imported vehicle sales were up overall by 6 per cent, but only 28.4 per cent of total import sales were of company-owned vehicles – reportedly the first time they’ve fallen below 30 per cent, and well below last year’s 40 per cent figure.