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> Having a car is somewhat of a luxury

That's true in many other places, too, like many European and US coastal cities where car ownership rates aren't nearly as high as many people probably think they are.

I wouldn't call it luxury. It's just that people don't find it attractive while living in Seoul. Average joe definitely can afford having a car.

"An advanced city is not one where even the poor use cars, but rather one where even the rich use public transport."

Does Korea also not allow Chinese cars?

They are allowed.

So we should expect Kia and Hyundai cars to get really good soon, if they have direct competition undercutting them like that.

Usually the luxury part is not the price of the car, it's the associated costs, especially parking. Coupled to the fact that you don't actually need the car (and it's probably a hassle for day to day life, so you only use it for the rare out of town trips).