SEOUL, July 15: Two years after South Korea agreed to take additional steps to open its auto market, the country remains "very, very closed" to imports, the president of the American Automobile Manufacturers' Association (AAMA) said on Monday.

"This is a very, very closed market and one that should be opened up. Not just because it presents opportunities for manufacturers of automobiles, but more significantly because it represents opportunities for consumers," AAMA president Andrew Card told Reuters in an exclusive interview.

A 1995 memorandum of understanding (MoU) between South Korea and the United States has had little impact, he added.

"The result (of the MoU) should be quantitative progress toward an open market. When you start off with import penetration of less than one per cent, and two years after the agreement you still have import penetration of less than one per cent, you have nothing," Card said.

Card and Camille Blum, secretary generals of the European Automobile Manufacturers' Association, are in Seoul to jointly Express their concerns about South Korea's auto market to officials from various ministries.

This is the first time European and American auto industry representatives have undertaken such joint discussions.

"We have come with a very common message and a common concern," Card said.Despite "Herculean efforts" by auto manufacturers in the United States and the European Union, the total penetration rate for imports in South Korea was 0.6 per cent for vehicles last year and 0.8 per cent for passenger cars, he said.

Other members of the Organisation for Economic Cooperation and Development (OECD) have import penetration rates of between 25 and 75 per cent, Card said.

South Korea joined the Paris-based OECD last year.Japan has an import penetration rate for autos of six per cent, he said.

"Japan's market is closed. Most people believe that, recognise it. But their market is probably 10 times more open than the Korean market," Card said.South Korea has imposed new taxes on sport utility vehicles and mini-vans purchased for use in Seoul and Pusan, violating an MoU provision prohibiting new measures affecting imports, Card said.

Card also complained that a frugality campaign, sponsored by private organisations but endorsed by the government, has renewed consumer concerns about tax audits or other government retaliation against purchasers of imported cars.

He said the government has suggested that consumers who borrow money to buy imported cars may also face an audit.

"Consumers are afraid to face the consequences that might come from a government with these kinds of statements. ''

``The anti-import campaign has been aggressive in Korea and it has had adverse lingering effects on the marketplace," Card said.

Card said he would renew an earlier request that the Korean government purchase some foreign cars for official use to signal its support of open markets to consumers.

"We would like to see the Korean government be aggressive in demonstrating to Korean citizens that the opportunities that come with being a member of the OECD are real," he said.

The AAMA last week asked the US government to investigate South Korea's auto market for possible sanctions under US trade law.

The US is expected to decide whether it will investigate South Korean barriers to car imports later this year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.