Hyundai Motor Company and Kia Motors are set to enter the certified used car market this month, aiming to address the longstanding issue of opacity in the industry. With the entry of these major automotive manufacturers, there is hope that transparency will be improved. To mark their foray into the used car business, Hyundai Motor Company plans to organize an event at their high-tech center dedicated to certified used cars in Yangsan, Gyeongnam next month. This center, previously a mass production facility, has undergone renovations to accommodate the used car dealership. Additionally, Hyundai and Kia will also sell used cars at the Auto Hub, a used car complex in Yongin.
To ensure quality, only vehicles that have passed 200 inspections will be selected by Hyundai Motor Company as “certified used cars.” These cars must be 5 years old or less and have fewer than 100,000 km miles. Moreover, in order to protect existing used car businesses, Hyundai and Kia have imposed sales volume limits. Until April 30, 2024, Hyundai Motor Company aims to maintain a market share cap of 2.9%, which will increase to 4.1% between May 1, 2024 and April 30, 2025. For Kia, the market share limits are set at 2.1% until April 30, 2024, and 2.9% between May 1, 2024 and April 30, 2025. Additionally, customers looking to purchase a new car will be required to apply for permission if they wish to buy a second-hand car.
While the sales volume of certified used cars from Hyundai and Kia is not expected to be substantial in comparison to the overall market, their entry holds promise for resolving long-standing issues such as information asymmetry. Notably, consumers have been demanding accurate information regarding used cars, citing concerns about fraudulent listings and misrepresentation. By focusing on online sales, Hyundai and Kia aim to provide a more transparent experience for customers. However, users will still have the option to view the car in person, which will likely be facilitated through a booking system.
In addition to Hyundai and Kia, other automotive companies such as KG Mobility, Renault Korea, and GM Korea are also eyeing the used car market. Lotte Rental, for instance, has recently launched an online used car trading platform called “My Car Save.” This innovative platform offers long-term rental cars that are returned after 3 to 5 years, allowing customers to enter into direct online contracts. Lotte Rental plans to secure 50,000 used cars for online trading by 2025.
With the potential entry of not only car manufacturers but also the rental industry into the used car market, it is expected that various related industries such as maintenance, parts, distribution, management, and testing will witness increased activity.
([Source: News1](https://www.news1.kr/articles/4585141), [Translation: Money Today Reporter Lee Tae-seong](https://www.moneytoday.co.kr/news/articleView.html?idxno=2026361))
Money Today Reporter Lee Tae-seong | 2023.10.01 07:22
(Siheung = News 1) Reporter Ahn Eun-na = 2023.5.17/News 1 Copyright (C) News 1 . All rights reserved. Unauthorized reproduction and redistribution prohibited. Hyundai Motor Company and Kia Motors will start selling certified used cars from this month. Attention is being paid to whether opacity, which has been seen as a chronic problem in the used car market, will be resolved with the entry of major companies. According to the auto industry on the 1st, Hyundai Motor Company plans to hold an event related to entering the used car business at the high-tech center dedicated to certified used cars in Yangsan , Gyeongnam, sometime next month. This is the site of Hyundai Motor Company’s current mass production center, and the existing building was demolished and renovated to establish a used car dealership. In addition to mass production, Hyundai Motor Company, together with Kia, plans to sell used cars at Auto Hub, a used car complex in Yongin.
Hyundai Motor Company only selects its vehicles that have passed 200 quality inspections and sells them as ‘certified used cars’ if they are 5 years old and have less than 100,000 km miles. In addition, Hyundai Motor Company and Kia Motors are limiting sales volume to protect existing used car businesses. Hyundai Motor Company has decided not to exceed 2.9% of the used car market share until April 30, 2024, and 4.1% between May 1, 2024 and April 30, 2025. Kia is limited to 2.1% until April 30, 2024, and 2.9% between May 1, 2024 and April 30, 2025. In addition, customers who want to buy a new car can only buy a second-hand car if they apply to buy a second-hand car.
Looking at the overall size of the market, the sales volume of certified used cars from Hyundai Motors and Kia is not expected to be large. The annual domestic used car transaction volume is 30 trillion won, and from the first half of this year, the transaction volume is more than 30% higher than new cars. According to Kaizuyu Data Research Institute, in the first half of this year, new car (passenger car) registrations were 783,653 units and used cars were 1,012,418 units.
However, with the entry of large corporations into the market, problems such as information asymmetry, which have been a chronic problem in the used car market, are expected to be resolved. Consumers have been demanding accurate information about used cars and the access of major corporations, saying they are being harmed by fake and fraudulent listings.
Hyundai and Kia plan to focus their used car sales online. However, as users can show the car if they wish, this part is expected to be implemented on a booking system.
Meanwhile, KG Mobility, Renault Korea, and GM Korea are also trying to enter the used car market. Here, Lotte Rental launched ‘My Car Save’, an online used car trading platform. This is a business that rents and sells used cars that are returned after long-term rentals of 3 to 5 years through a direct online contract. To this end, Lotte Rental has decided to secure 50,000 used cars for online trading by 2025.
If not only the five domestic car manufacturers but also the rental industry enter the used car market, various related industries such as maintenance, parts, distribution and management, and testing and certification are expected to become active.
[저작권자 @머니투데이, 무단전재 및 재배포 금지]
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