The Ministry of SMEs and Startups (Minister Chil-seung Kwon, hereafter referred to as the Ministry of SMEs and Startups) announced on April 28 (Thursday) the ‘Small and Medium Business Adjustment Council’ (hereinafter referred to as the Council ) and announced that the business adjustment recommendation was decided.
After the application for business adjustment in January, the Ministry of SMEs and Startups held a voluntary mediation between the parties (two times) and a voluntary business mediation council (four times) in which private experts participated since February, trying to reach an agreement, but the deliberation meeting was held when the difference in positions was not narrowed. held.
In the past, the Ministry of SMEs and Startups’ efforts to reach an agreement on a win-win plan between Hyundai and Kia Motors and the used car industry have continued since the application for a livelihood-type suitable industry was applied in February 2019.
After receiving a report on the results of the “Investigation on Damages to Small and Medium Enterprises” due to Hyundai Motor Co., Ltd. and Kia Co., Ltd.’s entry into the used car market conducted by two specialized institutions, the council listened to the opinions of the applicant and respondent, and It proceeded in the process of deriving and deciding on recommendations through discussion. The meeting ended 2 hours and 40 minutes later than the originally scheduled time due to a heated argument among the members over the agenda.
The main contents of the business adjustment recommendation decided by the council are as follows.
First, the start of the used car sales business of Hyundai Motor Co., Ltd. and Kia Co., Ltd. is delayed by one year (May 22, ‘23.4.30). However, trial sales of certified used cars are allowed within 5,000 units each during January to April ’23.
Second, the number of used cars sold by Hyundai Motor Co. and Kia Co., Ltd. is limited for two years as follows.
The standard for calculating the number of units sold is the arithmetic average value of the total number of transactions (business transaction (before mediation + prior sale) + party transaction) and the number of business transactions in the previous year of automobile transfer registration statistical data of the Ministry of Land, Infrastructure and Transport.
Third, Hyundai Motor Co., Ltd. and Kia Co., Ltd. purchase only when a customer requests to purchase a used car from a customer who wants to purchase a new car.
Fourth, Hyundai Motor Co., Ltd. and Kia Co., Ltd. must request an auction for used cars that are not sold as certified used cars among purchased used cars.
In this case, the auction participants should be limited to small and medium-sized enterprises or the number of auction requests to used car auction operators determined by Hyundai Motor Company and Kia Corporation in consultation with the Association of Automobile Sales Business Associations should be at least 50% of the total number of auction requests.
This business adjustment recommendation for Hyundai Motor Co. and Kia Co., Ltd. is applicable for 3 years (May 22, 22 ~ April 30, ’25). action is taken accordingly.
Small and medium-sized enterprises (SMEs) can apply for the business adjustment system when large corporations take over, start, or expand their business, which negatively affects or is likely to affect SMEs in the relevant region or industry. According to related regulations, the government may recommend large companies to delay the acquisition, start-up, or expansion of their business within three years, or to reduce items, facilities, and quantity.
In March, as the ‘Deliberation Committee on Subsistence Types’* did not designate the used car sales business as a suitable type of business for living, large corporations, including the finished car industry, were officially able to enter the used car market. In the market, consumer expectations for used car sales in the finished car industry have risen, while concerns have grown in the existing used car industry, including small and medium-sized businesses.
* The Shared Growth Committee designated the used car business as a suitable business for the protection of small and medium-sized enterprises (SMEs) twice in 2013 and 2016 and protected it for a total of 6 years. Apply for designation as
Reflecting this, the Review Committee on Businesses Suitable for Subsistence Types suggested an additional opinion that appropriate measures should be taken in consideration of small and medium-sized businesses in the future business adjustment process.
Prior to this, the Euljiro Committee of the National Assembly prepared an annual step-by-step entry plan* for the advancement of the finished car industry, and suggested that a solution to the concerns about the side effects of the finished car industry’s purchase of used cars is necessary.
* Set the upper limit of market share in the finished car industry: 5% in ’22 → 7% in ’23 → 10% in ’24
Accordingly, the Business Adjustment Council of the Ministry of SMEs and Startups paid a lot of attention to finding a compromise on how to satisfy consumer expectations while alleviating the impact of existing small and medium-sized used car operators from the finished car industry’s entry into the used car business.
The Ministry of SMEs and Startups reflects the needs of SMEs in this business adjustment recommendation eclecticly and grants some grace periods and step-by-step entry restrictions, so that SMEs have time to prepare for the establishment of a mutual aid association and computerization advancement, and to purchase used cars It is also expected to alleviate the negative impact of small and medium-sized enterprises (SMEs) due to supply shortages and increase in purchase prices.
In addition, Hyundai Motor Co. and Kia Co., Ltd. will be able to start the certified vehicle business in earnest from May of next year, while at the same time allowing limited early trial operation, consumers will also benefit from Hyundai Motor Co. and Kia Motors from January next year. It was expected to be able to purchase certified used cars of Co., Ltd.
Jo Joo-hyeon, head of the Small Business Policy Office at the Ministry of SMEs and Startups, who chaired the Business Coordination Committee, said, “Based on long discussions, the members have been working hard to find a harmonious way to promote the development of the used car market while practically securing ‘opportunities for SMEs’ business activities. I put a lot of thought into it,” he said.
We asked Hyundai Motor Co., Ltd. and Kia Co., Ltd. to “accept the business adjustment recommendation of the Ministry of SMEs and Startups and comply with it.”
In addition, he urged the small and medium-sized enterprises (SMEs) to “would not be 100% satisfied with the results of the council, but use the three-year business adjustment recommendation period as a preparation period to strengthen their own competitiveness”.
