Will Ford Withdraw From the South Korean Market?

Sluggish sales for 3 years
Heavy dependence on a single model

There are rumors that the Ford brand will withdraw from the South Korean market. Ford Korea is known to discuss various options, including changes in sales strategy and withdrawal. A new business plan is expected to be announced when discussions are concluded.

Ford made this decision because sales in the South Korean imported vehicle market steadily decreased, and profitability deteriorated. Ford’s overall sales in the South Korean market in 2023 plummeted by nearly 36% compared to the previous year, and concerns have been raised that the company relies only on specific models due to a lack of model lineup.

Sales began to slump in 2019, lower than Land Rover and Jeep

Ford recorded steady growth in the South Korean market from 2015 to 2018, selling more than 10,000 units. However, Ford’s sales have continued to decline since 2019. In 2019, Ford sold 8,737 units in the South Korean imported vehicle market, and excluding sales of Lincoln, its brand, sales amounted to 5,997 units.

Since then, Ford’s sales have steadily declined, selling only 3,450 units in 2023. The Lincoln brand sells 1,658 units; even if the Ford and Lincoln brands are combined, sales amount to about 5,000 units. Looking at all imported brands in the South Korean market, Ford’s market share was 13th with 1.2%, lower than Land Rover and Jeep.

Heavy dependence on Explorer despite launching new models in succession

Ford’s flagship model in the South Korean market is the Explorer, a large SUV that has gained great popularity by taking advantage of the expansion of the South Korean SUV market. After the launch of the 6th generation Explorer in November 2019, Ford’s overall sales volume increased from the previous year, with 5,405 units of the Explorer sold alone in 2020.

However, nearly 90% of the sales were concentrated on a single model, the Explorer, and the lineup itself was being evaluated as lacking. Therefore, despite Explorer’s high popularity, there have been many concerns. Aware of this, Ford Korea launched the mid-size off-road SUV Bronco, the mid-size pickup Ranger, and the large SUV Expedition, but sales were sluggish.

Price increase due to exchange rates becomes a burden for some customers

At the time of the launch of the 2021 Expedition, the prices started at 82.1 million won (about $ 60,860) for the Platinum trim, and the Ranger did not gain much popularity by launching an old model in the South Korean market at a time when the redesigned version was about to be unveiled. Bronco also attracted much attention as an off-roader when it was released, but its high price was an obstacle. At the time of launch, the starting price was 69 million won ( about $ 51,149), and as the price increased to 80.4 million won ( about $ 59 600) due to exchange rate fluctuations, many consumers felt burdened with the purchase.

In 2023, Bronco sales were 552 units, Ranger 924 units, and Expedition sales were only 120. The Explorer has not seen the effect of expanding its lineup, recording sales of 1,560 units. Meanwhile, Ford aims to turn around sales by launching the 7th generation Mustang (mid-size sportscar) in the South Korean market, so attention is being paid to its future.