In South Korea, sales of luxury cars have significantly decreased after the government introduced new rules for marking such vehicles. Now, it is required that all company cars priced at over $58,000 have a neon green license plate. In this way, the government is trying to prevent tax evasion.
The point is that company executives use company cars for personal purposes. Meanwhile, the acquisition of vehicles, fuel costs, and maintenance are recorded as company expenses. This reduces corporate operating profit, and consequently, taxes.
Two years ago, President Yoon Suk Yul promised to stop the use of luxury company cars for private purposes in elections. Bright green license plates were designed to clearly identify company cars to the public and deter people from using them privately.
Last year in Korea, more than 70% of sales of top models from car manufacturers such as Bentley, Lamborghini, and Rolls-Royce were made on corporate registrations. This is indicated by data from the Korean Automobile Importers and Distributors Association (KAIDA). But after the introduction of green license plates in January, the number of foreign luxury cars priced over 80 million won ($58,000) registered as company cars dropped by 27%.
According to KAIDA, Bentley car sales in Korea in the first quarter fell by 77% compared to the same period last year. At the same time, Rolls-Royce and Porsche car sales fell by 35% and 23% respectively. Sales of Lamborghini, 90% of which were on company cars last year, decreased by 22%.
It is expected that sales of luxury cars will further slow down in the future, as green license plates will attract negative attention.
"People will be upset to see supercars with green plates in entertainment, shopping areas, or at golf resorts," said Lee Han Ku from the South Korean research group, the Institute for Automotive Convergence, Chonbuk.
Source: ft
Comments (0)
There are no comments for now