Invisible Barriers.(consumer attitudes in South Korea)

In posh Kangnam, at the bustling heart of Seoul, a lonely Ford dealer makes an odd pitch to shoppers who barely glance at his shop. Inside the nearly deserted showroom, a display of flowers and pink ribbons presents a green Lincoln LS as the car of choice for--movie stars? Football players? No: government ministers. Salesman Jeon Kyeong Seob says the idea is to convince consumers they will no longer be punished for buying foreign autos. The pitch isn't working too well. This is Ford's main showroom in South Korea, and it has sold only about 100 cars so far this year. Why? "Patriotism," says Jeon, gazing out on a street filled with Korean cars made by Hyundai, Kia or Daewoo. "Koreans are patriotic people."

The supposedly inexorable force of globalization can't change that. After years of pressure from the Americans, Europeans and Japanese, South Korea has cut tariffs, taxes, rules and regulations, becoming one of the most open car markets in the world--on paper. Nevertheless, South Koreans almost never buy foreign cars. The combined marketing might of the world's great carmakers persuaded South Koreans to buy 4,400 imports last year--a mere 0.4 percent of the total market. Last week a visiting U.S. trade delegation demanded even lower barriers. Local importers can only sigh. They say no edict from Seoul can undo decades of government, corporate and union exhortations to buy Korean. "It is easy to change regulations and tax systems," says Son Eul Rae, a Mercedes dealer who heads an auto- importers association. "But changing a culture or a mind-set is not."

This culture was built on anger. After decades of Japanese occupation ended with Japan's defeat in World War II, South Korea set out to win a respectable place in the world. "Nation building through exports," the rallying cry of President Park Chung Hee in the early 1960s, was emblazoned on factory walls all over the country. Luxury-import buyers were publicly denounced as traitors. Until the 1980s, smoking foreign cigarettes was a crime punishable by jail. But no luxury item had more power as a patriotic symbol than the car.

That's still true. The Buy Korean campaign tapped into a deep Confucian bias against displays of wealth. During the 1997 Asian financial crisis, officials in Seoul loudly blamed their currency's plunge on profligate Koreans' buying foreign goods. The real problem was that the country's consumers were scared to buy anything. But TV news reports on the crisis routinely showed footage of foreign-car salesrooms anyway. Citizen vigilantes took up the cause, slashing tires and scratching paint jobs on foreign cars left unattended in Seoul. "I heard so much about harassment of import cars or their drivers," says a 41-year-old restaurant owner who uses only secure pay lots to park her blue BMW. "I actually hesitated buying this car because of that."

The harassment decreased as the economy recovered, but the resentment still lingers. An import dealer says he doesn't allow TV crews in his showroom if they are from the city desk of a big Seoul network, because he knows the footage will be used to bash foreign-car buyers, who are abused enough. In a recent survey of 200 domestic-luxury-car owners, 70 percent said buying imports would lead to greater "social disparity," and nearly half avoid imports for fear of "dirty looks" from fellow Koreans.

That hostility is about more than cars. It's about economic class and corruption, too. Back in the Park era, when tax dodging was a national sport, one of the easiest ways to catch rich cheats was to audit anyone who traveled abroad or bought pricey foreign cars. Many of the targets were doctors, lawyers and other professionals with substantial cash incomes, rather than executives, whose corporate salaries were easier to trace. Until only a few years ago, simply owning a foreign car was enough to trigger an audit. Foreign carmakers protested the practice as an underhanded form of protectionism by intimidation.

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