Hyundai Motor Group starts selling used cars
Only vehicles within 5 years and 100,000 km
The ‘catfish effect’ in the current used car industry
A #Office employee bought a Mercedes-Benz S-Class, which had only been on the market for a year, for 125 million won, almost half the price. The used car dealer boasted that it was an accident free vehicle, and there was no problem in the used car’s performance check record. However, it was revealed that this car had been underwater during the rainy season a year ago.
#B found a Hyundai Kona sold for a bargain price of 4.7 million won on a used car trading site. The dealer who met Mr A who came to the trading complex suddenly changed. They are asking for 28.8 million won, six times higher than the original price. When Mr A refused to buy, the dealer spat abusive language and locked Mr A in the car for about 30 minutes.
It is a second-car criminal act that is caught by the police. Getting caught by the police is only the tip of the iceberg. The victim even took his own life out of injustice.
That is why consumers ignore the objections of the used car industry that their right to live is threatened and welcome the entry of big companies.
After many times, big companies enter the used car market from the new year. Hyundai Motor Group leads. After starting a pilot project from January to April next year, full sales will start in May.
Before this, the Ministry of Small and Medium Enterprises and New Businesses said at the Small and Medium Enterprises Coordinating Council (Council) held on April 28, “The start of Hyundai Motor and Kia’s used car sales business will be delayed for one year and it will start. on May 1 next year.” In March, certified used cars can be sold within 5,000 units each.”
Hyundai and Kia to start trial sales in January
According to the auto industry on the 31st, Hyundai Motor Company will introduce high-quality certified used cars for the first time as a domestic finished car brand.
It is a used car sales system introduced by imported car brands such as BMW, Benz, Audi, Porsche, Jaguar, Land Rover, Volkswagen, Volvo, and Lexus.
Certified used cars are considered ‘luxury used cars’. This is because, by using the technology that the car manufacturer has, it goes through precise performance inspections and repairs, and then certifies the quality before selling.
Like imported car brands, Hyundai selects vehicles that have passed over 200 inspections for vehicles less than 5 years and 100,000 km, and then sells them through ‘trading’, which raises the quality to a level comparable to a new car.
Hyundai Motor Company will open a high-tech center dedicated to certified used cars in Yangsan, Gyeongsangnam-do in January next year. The size of the center is 30,059㎡ (9093 pyeong), which includes a diagnosis building, a maintenance building, and an office building. It plans to sell 15,000 units annually.
The plan is to raise the marketability of used cars to the level of new cars by operating a merchandising organization dedicated to internal / external maintenance and improvement (sheet metal, painting, wheels and tires, vehicle polish, etc.) after precise diagnosis here.
It is known that renewal centers exclusively for Kia certified used cars will be set up in the metropolitan area and will be expanded across the country in the future.
Certified used cars contribute to solving information asymmetry
Hyundai Motor Group certified used cars are expected to contribute to solving ‘information asymmetry’, a chronic disease of used car distribution.
Unlike new cars, the quality of used cars is different, and unless you are a car expert, you cannot understand the performance properly. This is due to information asymmetry.
Information asymmetry is an economic theory put forward by the Nobel Prize-winning economist George Akerlof, who is a professor at the University of California, Berkeley.
The side with little or no information makes decisions against them. This leads to a lack of trust in the market, which ultimately leads to destruction and market collapse.
Used car distribution is also a place where fraud and criminal acts are likely to occur frequently due to information asymmetry. Although the dealer, the seller, knows the condition of the used car in detail, the consumer cannot know the condition in detail.
Due to information asymmetry, used car scammers are victims of fake sales and buy accident-free cars, but instead buy them at high prices.
It is also a target of scammers trying to avoid cars with manageable mileage or cars that have hidden signs of flooding or accidents. Affected consumers do not trust the market. forced to buy
Hyundai Motor Company also announced plans to build an ‘integrated used car information portal (tentatively called the Used Car Research Center)’ to solve information asymmetry.
Through the integrated used car information portal, users can get used car market indicators such as ▲ integrated information on the performance and condition of used cars ▲ appropriate price calculation ▲ fake/bait sales screening ▲ used car value index ▲ actual transaction number statistics ▲ market price trend by model ▲ sales position by model ▲ trend reports, etc.
In consultation with the Ministry of Land, Infrastructure and Transport and the Insurance Development Institute, Hyundai Motor Company is also promoting the provision of ‘integrated information on the performance and condition of used cars’ by combining vehicle history information provided by the government and agencies with proprietary information. Hyundai Motor Company.
Users can see at a glance the current performance, condition and history of the used car they want to buy, such as whether it has been in an accident, insurance repair history, flooded car, fault and recall history, specifications and options information.
It also provides a function to filter fake and bait sales, one of the main types of damage in used car trading.
It also plays a role in improving transparency in used car distribution
Hyundai Motor Group is also establishing a win-win relationship with the existing used car industry, not a hostile one.
As a plan for win-win cooperation with existing industries and development of the used car market, Hyundai Motor Company ▲ supplies purchases other than certified used cars to the existing trading industry through auctions ▲ limiting the market share per year ▲ opens portal integrated used car information ▲ supports training for workers in the used car industry, etc. already introduced
Hyundai Motor Company announced that it will supply vehicles that are out of scope of sale within 5 years and 100,000 km to the current sales industry through fair means such as auctions.
Earlier this year, Hyundai Motor Company announced plans to self-limit its market share from 2.5% in 2022 to 3.6% in 2023 and 5.1% in 2024.
According to data from the Association of Automotive Industries (KAIA), the used car market share of five domestic car manufacturers, including Hyundai and Kia, is between 7.5% and 12.9% in 2026. This means that even at after 4 years, only 1 in 10 used cars will be sold through 5 car manufacturers.
In order to develop the used car market and strengthen the competitiveness of the used car industry, Hyundai Motor Company will open the ‘Used Car Integrated Information Portal’ to the existing industry, and will also transfer its technical knowledge and to finished information. a car manufacturer.
To improve the expertise of used car workers, new technology training related to future vehicles such as electric vehicles and self-driving cars and the latest CS (customer satisfaction) training is supported.
Hyundai expects that the size of the used car market will grow further as the overall trust in the market increases as the finished car industry enters the used car market.
It is expected that maintenance and used car parts, distribution and management, testing and certification will be implemented, and new cutting-edge industries using used car mobility services and ICT technology will come to’ obvious.
Consumers are also welcomed by large corporations.
Consumers welcome Hyundai Motor Group’s entry into the used car market.
According to the used car trading app satisfaction survey released by the Korea Consumer Agency on the 28th, most of the respondents were in favor of entering the used car market by finished car manufacturers such as Hyundai Motor and Kia.
The survey was conducted with 1,340 users who have experience using the top 5 used car trading apps, including Bobaedream, Encar, First Car, KB Cha Cha Cha, and K-Car.
The score for entry into the used car market by finished car manufacturers came out as 4 out of 5 points. The Consumer Agency gave 1 point for very negative and 5 points for very positive.
Consumers evaluated access to finished car manufacturers positively for reasons such as ‘safer items for sale’, ‘wider range of choices’, and ‘less damage’.
A survey conducted by the Korea Consumer Agency on 501 consumers who bought a used car within a year in April also shows why they welcome the entry of big companies.
Respondents presented bogus and bait sales, opaque pricing information, and unreliable car performance and condition inspection records as problems in the used car market. It is also an endemic disease in the used car market that conglomerates posit as a justification for entering the used car market.
Civic groups involved in motor vehicles also welcome the development of large corporations. Some groups stressed that conglomerates should enter the market to prevent consumer damage from 2019, when discussions on opening the used car market began.
Lim Gi-sang, CEO of the Korea Automobile Citizens Coalition, said, “Opening up the used car market will make the distribution structure more transparent and expand consumer choices.”
However, entry into the used car market is noted as limiting the elimination of all false sales and baiting and fraudulent sales, which have been a problem in the past.
Following the new car market, there are also concerns that only Hyundai Motor Group’s monopoly structure can become more robust in the used car market.
Representative Lim Ki-canu said, “We expect that fraudulent activities that attract consumers who have difficulty buying relatively expensive certified cars at cheap or low prices will become more sophisticated.”
Future Automotive Department Professor Ho-geun Lee (Principal Policy Committee, Consumer Sovereignty Citizens Association) said, “Diagnosis and warranties for vehicles within 5 years and 100,000 km, and successive interest rate hikes may increase’ r burden on consumers to buy.” The certified second-hand car policy needs to be fine-tuned so that there is no backlash that it is being used as a sales marketing tool,” he pointed out.