Decision of the Business Adjustment Council… Imprisonment for not more than 2 years or a fine of not more than 150 million won
“Struggle to come up with a compromise plan to mitigate the impact of the used car industry and meet consumer expectations”
On the 28th, the recommendation of the Small and Medium Business Coordination Council that Hyundai Motor and Kia should enter the used car market in May of next year, a year later than the original date, came out.
In addition, the number of used cars sold is limited for two years after entering the market.
If Hyundai Motor and Kia do not comply with this, they may face up to two years in prison or a fine of up to 150 million won.
The Ministry of SMEs and Startups announced on the same day that the SME Business Coordination Council (Correction Council) has decided on a recommendation based on these details in relation to Hyundai Motor and Kia’s entry into the used car market.
The council said, “We will postpone the start of the used car sales business of Hyundai Motor and Kia by one year to start on May 1, next year. did.
In addition, Hyundai and Kia have also limited the amount they can sell in the early stage of their entry into the used car market.
Specifically, Hyundai can sell only 2.9% of all used cars from May 1, 2023 to April 30, 2024, and only 4.1% from 2024 to April 30, 2025.
During the same period, Kia’s used car sales are limited to 2.1% and 2.9% of total sales, respectively.
In addition, Hyundai Motor and Kia customers can only buy used cars from them when they request to sell their existing used cars under their brand as a condition of buying new cars.
Among the purchased used cars, the quantity that is not sold as certified used cars of less than 5 years and less than 10 km must be turned over to an auction.
At this time, participants in the auction were limited to small and medium-sized enterprises (SMEs), or the amount requested by Hyundai Motor and Kia to be auctioned to a business operator determined in consultation with the Association of Automobile Traders Associations was set to exceed 50% of the total.
This business adjustment recommendation will be applied for three years from the 1st of next month to April 30, 2025.
If the parties to the project coordination do not follow the recommendations, the Ministry of SMEs and Startups may issue an ‘execution order’.
The recommendations issued today are interpreted as a compromise between the requirements of the used car sales industry and Hyundai and Kia Motors.
The used car sales industry has demanded that Hyundai and Kia delay the start of their business for up to three years and limit the purchase and sale of used cars for up to three years after that.
Hyundai and Kia Motors are of the view that although sales can be limited within a certain range, it is impossible to postpone business and limit purchases.
The council said, “We struggled to find a compromise that satisfies consumer expectations while alleviating the impact of existing small and medium-sized used car business owners following the entry into the used car business of the finished car industry.” Please use it as a preparation period.”
Previously, on the 17th of last month, the ‘Used car sales industry suitable for livelihood type review committee’ under the jurisdiction of the Ministry of SMEs and Startups excluded the used car sales business from the suitable livelihood industry.
This opened the way for large automakers to enter the used car sales business.
The used car trading industry applied for business adjustment to the Korea Federation of Small and Medium Businesses in January to prevent Hyundai and Kia from entering the used car market ahead of the implementation of the measures by the Ministry of SMEs and Startups.
The Business Coordination Council may recommend that large companies delay the acquisition, start-up, or expansion of their businesses for up to three years or reduce production items, quantity, and facilities so that SMEs can secure business opportunities.
/yunhap news
