Tesla may open first dealership in Korea
In this article (5)
Tesla Motors, the Silicon Valley-grown electric vehicle manufacturer, may open its first Korea dealership in a Shinsegae Group shopping complex within this year.
“The talks are positive, for sure, but the final confirmation has yet to be reached,” said a Shinsegae Group spokesperson.
“If the final confirmation is made, Shinsegae Property, which is pursuing the deal with Tesla, will give us notice,” he added.
According to industry sources Thursday, if negotiations succeed, Tesla will open its first Korean dealership in Shinsegae’s Starfield Hanam shopping complex in Gyeonggi as early as November. The complex is a 30-minute drive from Seoul’s Gangnam District.
Tesla CEO Elon Musk also confirmed Seoul as one of his next targets along with Taipei and Mexico City for the company’s high-end electric vehicles.
“We are also accelerating store openings and plan to add a new retail location every four days on average during the remainder of Q3 and through Q4,” said Musk in an earnings report distributed Wednesday.
“We are adding stores in new population-dense markets like Taipei, Seoul, and Mexico City, while also adding stores in our most mature markets like California,” he added.
Scheduled to open early next month, Starfield Hanam is Shinsegae Group Vice Chairman Chung Yong-jin’s ambitious project to make a retail complex that includes not only shopping venues but all sorts of entertainment- and leisure-related facilities such as a waterpark, cinema and aquarium. Korea doesn’t have such a complex.
In addition to offering some 750 retail brands, the complex will also house Asia’s first BMW dealership that handles both the original BMW and Mini vehicles. Luxury motorcycle brand Harley Davidson will have a store that displays not only vehicles but also its clothes and accessories lines.
“If the final confirmation is made, Shinsegae Property, which is pursuing the deal with Tesla, will give us notice,”
Since last December, Tesla has been gearing up to enter Korea by registering the corporate name Tesla Korea Limited and sending out job advertisements for car dealers and mechanics.
Korea’s retail giants have been sending out feelers to the prestige car company, counting on its attractiveness to the general public.
Lotte World Mall in Jamsil District, eastern Seoul was considered a candidate to house a Tesla shop, but the negotiation fell apart early this year.
Opening an independent dealership in Gangnam District was raised as another possible choice and Tesla is still reported to be considering that option.
Tesla is known for a unique way of directly operating and managing its branches, instead of franchising dealerships as most carmakers do.
Its first New York showroom, which Musk located in the funky Red Hook neighborhood of Brooklyn earlier this year, symbolizes the concept. It shows that a Tesla shop is not exclusively for car shoppers but is open to anyone interested in futuristic car technology. That also explains why many Tesla dealerships are in U.S. shopping malls.
“The quality of our new locations is also improving as many shopping malls now consider us the new standard for an anchor tenant based on the amount of foot traffic that we draw and our very high revenue per square foot,” said Musk in the earnings report released Wednesday.
If Shinsegae’s negotiations with Tesla succeed, its shop in Starfield Hanam will operate as a display until the Korean government allows the luxury electric vehicles on Korean roads
In the meantime, Tesla’s second quarter earnings announced on Wednesday fell short of analysts’ expectations. It posted a $293 million net loss in the second quarter, a more than 60 percent drop compared to last year’s Q2 operating loss of $184 million.
Questions & Answers
Q.What is the expected timeline for Tesla to open its first dealership in Korea if negotiations are successful?
What is the expected timeline for Tesla to open its first dealership in Korea if negotiations are successful?
If negotiations are successful, Tesla could open its first Korean dealership as early as November. It would be located in Shinsegae’s Starfield Hanam shopping complex in Gyeonggi, which is scheduled to open early next month.
Q.Where else in Korea was considered for a Tesla shop, and what happened to those plans?
Where else in Korea was considered for a Tesla shop, and what happened to those plans?
Lotte World Mall in Jamsil District, eastern Seoul, was a candidate, but negotiations fell apart early this year. Opening an independent dealership in Gangnam District was also raised and is reportedly still being considered.
Q.How does Tesla's approach to opening dealerships differ from most carmakers?
How does Tesla's approach to opening dealerships differ from most carmakers?
Tesla directly operates and manages its branches, rather than franchising dealerships like most carmakers. This model is seen in locations like its New York showroom, which aims to attract anyone interested in futuristic car technology.
Q.What are the financial results Tesla announced for the second quarter?
What are the financial results Tesla announced for the second quarter?
Tesla announced a net loss of $293 million in the second quarter. This figure represents a more than 60 percent drop compared to the $184 million operating loss reported in the second quarter of the previous year.
Reader pulse
Tesla in Starfield Hanam?
18,713 votes so far