A “catfish” appears in the used car market

“Certified by Hyundai Motors: Official Launch of Certified Used Hyundai and Genesis Cars” Hyundai Motor Company executives including the executive vice president, Ryoo Won-ha, disclose certified used cars on the “Media Day for Certified Used Hyundai and Genesis Vehicles” at the certified used car center in Habuk-myeon, Yangsan-si in Gyeongsangnam-do on October 19. Yonhap News

Hyundai Motor Company will begin selling used cars on October 24. South Korea’s largest automaker has emerged as a catfish in the less than transparent used car market. Some expect the latest change to clean up and develop the market with a greater influx of reliable used cars and fewer fake offers, while others warn that this could mean a drop in sales for existing small and medium-sized dealers.

Hyundai Motor Company had a meeting with the press to introduce certified used Hyundai and Genesis vehicles at its used car center in Yangsan, Gyeongsangnam-do on October 19 and announced the official launch of its certified used car business. The automaker will certify the quality of the secondhand vehicles and sell them after quality inspections, repairs and washes at the center.

Hyundai Motors released two used vehicles, a Palisade and a Genesis G80, refurbished and their quality certified, Thursday and announced that the company would begin selling used cars on October 24. Kia will also jump into used car sales this month. Hyundai has set up another certified used car center in Yongin, Gyeonggi.

The certified used car centers will sell secondhand Hyundai and Genesis vehicles younger than five years and with a mileage of under 100,000 km. Hyundai has set its sales target for this year, with slightly over two months remaining, at 5,000 vehicles and plans to gradually increase its target. The company expects to sell 20,000 vehicles next year.

Hyundai and Kia are jumping into the domestic used car market because they see potential in the 30 trillion won market. Although it is smaller than the second quarter sales (42 trillion won) of Hyundai Motors, it is a market larger than the Q2 sales of Kia (26 trillion won). In South Korea, around 2.5 million used cars are sold in a year, more than the 1.7 million new cars sold.

Now that automakers are jumping into the secondhand car market, consumers expect it to increase the credibility of vehicles on sale. Hyundai will provide Hi-LAB, a comprehensive information portal for used cars based on its own manufacturing data and information secured from other agencies. The company will also develop a program to calculate prices using artificial intelligence (AI). Hyundai announced that it secured 80% of the actual transaction prices for used cars sold in South Korea in the last three years.

When purchasing a used vehicle, the company will calculate the purchase price with the AI-based price calculation program and information on the condition of the car verified by an expert. The company explained that the specialist would not negotiate prices or appraise the vehicle. Based on the time the used car is purchased, the company will provide a free warranty policy for one year, 20,000km, and customers can receive maintenance services including warranty services at more than 1,300 Hyundai and Genesis service centers nationwide, just like new cars.

However, there are concerns that existing small and medium-sized used car dealers could suffer losses. A representative of a used car dealership in Yongin shared his concerns and said, “Most of the used cars up for sale are Hyundai and Kia vehicles, and if these automakers sell used cars directly, our business will suffer a serious blow.” He added, “Eventually, competition will be fierce among smaller dealers in the used car market for vehicles older than five years with a mileage of over 100,000km, which Hyundai has not entered.”