This study consists of two parts. one is to examine the effects of the implementation of Korea-EU FTA on the level of trade of automotive sector between Korea an EU. The other part is to analyze the level of market integration of EU automobile sector. The analysis on the market integration of EU automobile sector will help the Korean car-makers to build the market strategy for the EU countries after the implementation of Korea-EU FTA. In this study, to find the effects of tariff elimination due to the Korea-EU FTA, the econometric methods for estimating trade elasticities are used. Using log-linear model the export or import equation in which the amount of export or import is the function of real income and relative price is estimated. By estimating the export or import equation, the price elasticity of export or import demand can be obtained. The other method used in this study is the estimation of vector error correction model which is appropriate for the case when unit-root time series variables are cointegrated with each other. By estimating vector error correction model, the long-run relationships between variables such as export and export price can be obtained. With these econometric methods, the price elasticities of export and import demand of automobiles between Korea and EU are estimated. The results find that the exports of medium-sized and large-sized cars to EU will increase rapidly and also the import of large-sized cars from EU will be increased after the Korea-EU FTA will be effective. The exports of automotive parts to EU is also expected to increase due to Korea-EU FTA. European car market was well known for its being segmented. However, the institutional barriers that have prevented the market integration have diminished. Car block exemption that has been the latest barrier to prevent arbitrage trade between EU countries was partially liberalized in 2002. And also the establishment of EMU and the creation of common currency, euro, removed the cause of price differential between countries due to exchange rate fluctuations. Thus, finding the level of segmentation or integration of EU car market is very critical for the Korean car-makers to set up the strategies for expanding their shares in EU market. In this study the level of market integration in EU car market is investigated using the percentage price differentials between EU countries. Among the popular types of automobiles, 8 kinds of automobiles are chosen and the coefficient of variation for each type of each year is derived. The results show that the market for the whole EU countries is less integrated but the market for the existing 12 EU member countries is relatively more integrated than that for the new 15 EU member countries. Even though it is not clearly evident, the market for Eurozone is more integrated than that for Non-Eurozone. These results imply that Korean car-makers should take different approaches for the western European countries such as the existing 12 members or Eurzone and the eastern European countries when they devise the market strategy to maximize the gains from better conditions for market access to EU due to the Korea-EU FTA. They had better regard the car markets for western European countries as one market. But for the markets for eastern European countries, they need to have different strategy for each country to capture each market in advance.