Hyundai, Kia poised to join growing used car market in Korea

[Courtesy of HMG]

Hyundai Motor Co. and Kia Corp. are gearing up to enter the booming certified used car market in South Korea. With an annual trading volume of 30 trillion won ($22.7 billion) and transaction numbers exceeding new car sales by over 30 percent in the first half of this year, the auto giants are eager to tap into the lucrative sector.

According to industry sources on Monday, Hyundai Motor and Kia are actively recruiting specialized personnel to support their entry into the certified used car market. Kia is currently in the process of hiring certified used car specialists in the city of Yongin, Gyeonggi Province, focusing on areas such as certified used car distribution and management, customer consultation, and sales support.

Hyundai Motor had already begun hiring customer consultation staff for its used car contact center in May. Both Hyundai Motor and Kia are developing online platforms for certified used car sales.

Entering the used car business requires not only a strong online presence but also physical locations to store and showcase the vehicles. Hyundai Motor and Kia have chosen Yongin Auto Hub as one of their key locations.

Yongin Auto Hub is known for its accessibility, being close to Seoul, and is one of the largest used car trading hubs in the country. Kia has also completed the registration of its automobile sales business in Jeongeup, North Jeolla Province. According to market tracker CarIsYou, 7,836,653 new cars were registered in the first half of this year, while 1,012,418 used cars changed hands.

Hyundai Motor and Kia seem to be focusing on defending their brand values by entering the certified used car market rather than purely generating profits.

Creating a stable supply of used cars at reasonable prices can increase the trustworthiness of used cars, ultimately raising the overall residual value of Hyundai Motor and Kia’s brand-certified used cars.

It is not just Hyundai Motor and Kia that are eyeing the potential of the used car market. Lotte Rental, a company known for its car rental business, is also expanding into the used car business.

Lotte Rental is set to launch an online used car trading platform called “MyCar Save” this month, which will offer used cars that have been rented for 3-5 years and returned, making them nearly as good as new. To achieve this goal, Lotte Rental aims to secure 50,000 used cars for online transactions by 2025.

The company is also aggressively investing in expanding its used car rental and sales business. It decided to invest over 100 billion won to increase its ownership stake in the car-sharing company SOCAR to 32.9 percent, with the intention of operating rental car services on a platform similar to car-sharing in the future.

Lotte Rental already holds an 84.7 percent stake in another car-sharing company, GreenCar. In addition to these investments, the company has allocated 2 billion won for FINCA, a used car maintenance and diagnostics company.

Another intriguing aspect of Lotte Rental’s strategy is its focus on exporting used cars. Last year, the company exported about 3,000 used cars to countries like Saudi Arabia, the United Arab Emirates, and Jordan. Next year, it plans to establish local subsidiaries in the Middle East to further expand its overseas sales efforts.

Furthermore, Lotte Rental is set to become the only publicly traded pure rental car company in Korea early next year as its competitor, SK rent-a-car, is set to be delisted after being fully incorporated into SK networks as a wholly-owned subsidiary.