SEOUL, March 17 (Korea Bizwire) — The government decided Thursday to allow large companies to advance into the secondhand car market despite opposition from small players in the business.
A deliberation committee under the Ministry of SMEs and Startups decided not to designate secondhand vehicles sales as one of the “livelihood businesses” that must be reserved for small enterprises and startups.
The committee has reviewed the case since January after used car dealers filed a petition with the ministry to block the country’s top carmaker Hyundai Motor Co. and its affiliate Kia Corp., from entering the market.
Last year, Hyundai and Kia registered for B2C used car business licenses, while the government put a halt to their business launch amid strong objection from existing players.
The used car business was first included in 2013 in the category from which large companies are banned.
The designation expired in February 2019 and existing dealers requested a redesignation.
In November 2019, a preliminary review committee recommended against reimposing the ban but a final decision was delayed for more than two years largely due to the COVID-19 pandemic.
Announcing the decision Thursday, the committee said the entry by Hyundai and Kia “is expected to cause damage to small and medium-sized companies so appropriate measures are needed.”
Hyundai and other carmakers have been in talks with the government and current used car business operators over the matter, but they have yet to reach a consensus.
Earlier this month, Hyundai outlined its used car business plans, under which it vowed to restrict its market share to 5.1 percent in the local market by 2024 from 2.5 percent in 2022 and 3.6 percent in 2023 so as to coexist with other operators in the used car sector.