SEOUL, March 7 (Korea Bizwire) — Hyundai Motor Co. on Monday outlined its used car business plans to expand customers’ right of choice, though the government put a halt to the business launch due to objection from existing players.
In the past two years, Hyundai has had rounds of talks with government officials, other carmakers and existing used car dealers, but they have not reached any tangible result or a breakthrough.
In December, the Korea Automobile Manufacturers Association (KAMA), which represents the interest of complete vehicle carmakers, said five local carmakers will register for B2C used car business licenses.
Hyundai and its smaller affiliate Kia Corp. registered for the licenses but three others — GM Korea Co., Renault Samsung Motors Corp. and SsangYong Motor Co. — are still under consideration, a KAMA spokeswoman said by phone.
Faced with strong objection from the Korea Usedcar Dealers Association, the Ministry of SMEs and Startups recommended the automotive conglomerate to suspend its launch of the certified used car sales business.
The association argued Hyundai’s entry will have a negative impact on the existing B2C secondhand car dealers.
Under its business plans, Hyundai will sell used cars that pass a strict quality testing process after purchasing its own brand vehicles that have been on the road for less than five years and traveled less than 100,000 kilometers, the company said in a statement.
Hyundai said it will restrict its market share to 5.1 percent in Korea by 2024 from 2.5 percent in 2022 and 3.6 percent in 2023 to coexist with competitors in the used car industry.
The maker of the Sonata sedan and the Palisade SUV also plans to introduce the “trade-in” program in which the company purchases used Hyundai brand cars from customers and offers discounts when they buy new Hyundai models.
“Supply of (Hyundai’s) certified quality used cars (which underwent the strict testing process) and purchases of secondhand (Hyundai) cars from customers will help raise the models’ residual value and enhance customers’ trust in the used car market,” the statement said.
The company plans to set up an online portal to provide comprehensive information on the vehicles up for sale in order to break the information monopoly long held by dealers.