Hyundai Motor and Kia’s entry into the used car market is delayed by one year to May next year. The number of units sold will also be phased out for two years.
On the 28th, the Ministry of SMEs and Startups held a small and medium-sized business adjustment deliberative meeting at the Ministry of SMEs and Startups in Sejong City and decided on a final recommendation regarding entry into the used car market of large corporations. The recommendation focused on three issues: the timing of when large companies start their used car sales business, the scope of used car purchases, and the used car sales standards.
According to the recommendations, large automakers can enter the used car market in May next year. However, it has decided to allow trial sales of certified used cars within 5,000 units each from January to April 2023.
The number of units sold is also limited for two years. From May 1, 2023 to April 30, 2024, Hyundai Motor Company is limited to 2.9% of the total used cars, and Kia Motors is limited to 2.1%. From May 1, 2024 to April 30, 2025, it can only be sold within 4.1% of Hyundai Motor and 2.9% of Kia. The standard for calculating the number of units sold is the arithmetic average of the total number of units sold in the immediately preceding year and the number of units sold by business operators of the Ministry of Land, Infrastructure and Transport’s automobile transfer registration statistical data.
The scope of purchase also depends on the clue that a used car can be purchased only when a consumer who wants to purchase a new car requests it. In addition, Hyundai and Kia must request auctions of purchased used cars that are not sold as certified used cars. Park Soon-hong, head of the win-win cooperation support division at the Ministry of SMEs and Startups, explained, “We tried to find a compromise on how to satisfy the expectations of used car consumers while alleviating the impact of small and medium-sized used car operators.” He said that by eclecticly reflecting the needs of the small and medium-sized businesses, the grace period and step-by-step entry restrictions were placed on large enterprises, giving small and medium-sized businesses room to strengthen their competitiveness.
This business adjustment recommendation is effective for three years and has legal effect. The Minister of SMEs and Startups may issue an implementation order if the recommendations issued under the Large-Small Business Cooperation Promotion Act are not followed without justifiable reasons. Failure to comply with the enforcement order is subject to criminal punishment of up to two years in prison or a fine of up to 150 million won.
Regarding the recommendation, Hyundai Motor and Kia said, “It is a bit disappointing that consumers who are expecting high-quality used cars and a transparent and objective trading environment provided by the finished car industry are not sufficiently considered, but we will follow the recommendation in a win-win situation.”
By Kim Jin-won, staff reporter jin1@hankyung.com
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