Articles : http://www.theautochannel.com/news/2006/01/02/202907.html
http://www.autotradecouncil.org/Upload/Korea_Import_Sales_2004.xls
http://kr.news.yahoo.com/service/news/shellview.htmlinkid=4&articleid=
20071006014005445g0&newssetid=746

According to the first article, Chosun newspaper reported in 2006 that Toyota Lexus shunted Germany’s BMW from its position as Korea’s most popular imported car, which BMW had held for six years since 1999. Since Lexus started sales in Korea in 2001, the sales growth had been almost doubled until 2004. Even though German brands such as BMW and Mercedes-Benz showed solid sales continuously, people’s high demand on Lexus made the last starter ranked first.

The success of Lexus is not only because of its high quality with chic design, but also because of people who bought Lexus in early 2001. When remodeled Lexus was shown in Korea, people showed some interest but not a superior one. However, as some people bought it, people showed great satisfaction on this brand. When they were interviewed with media, they scored highly on qualities and design. Also, they wrote car reviews on automobile websites, and posted their positive impressions on their blogs. That’s why Lexus became popular even before not many people actually saw or took Lexus. Like these, as previous buyers recommended Lexus to their acquaintances, Lexus became the best selling car brand eventually. Positive network effects were occurred in this case, since as more people bought, potential customers valued Lexus higher than before, and bought it at the end.

However, after 2006, Lexus showed some stagnancy in its sales. As more people bought Lexus, people became to have a notion that Lexus was not luxurious brand like BMW. People tend to have more satisfaction and attractiveness when what they bought is not abundant. It is a negative network effect and this has affected the sales of Lexus in Korea after it peaked in 2006. Since then, the sales of BMW and Mercedes-Benz have increased and now, BMW regains the top sales position in Korea.