Korean Carmakers Expected to Launch Used Car Sales | Be Korea-savvy

Korean Carmakers Expected to Launch Used Car Sales

Seen here is a used car market in Seoul on Oct. 13, 2020.  (Yonhap)

Seen here is a used car market in Seoul on Oct. 13, 2020. (Yonhap)

SEOUL, Dec. 27 (Korea Bizwire)Without waiting for the government’s final decision, South Korean carmakers have declared that they will launch used car businesses starting from next month.

Hyundai Motor Co. and affiliate Kia Corp. are set to launch full-scale preparations for a launch into the used car market from next month, according to industry sources.

“Domestic carmakers will carry out the procedures needed to launch used car businesses, including the registration of business licenses and the establishment of physical spaces, in their efforts to kick-start used car sales from January” Jeong Marn-ki, president and CEO of the Korea Automobile Manufacturers Association, said in a forum held last week.

While there are no legal restrictions preventing carmakers from entering the used car market, manufacturers have refrained from stepping into the used car market over the past three years primarily due to opposition from the used car dealer industry.

Since the used car dealer industry showed no will for compromise even after repeated rounds of negotiations, carmakers finally decided to proceed with their own used car businesses without any agreement.

Under the current Automobile Management Act, carmakers can step into the used car dealer business only if they register their business with municipal governments within their jurisdictions.

Given that Hyundai and Kia have strenuously prepared for the launch of their own used car businesses, there are not expected to be any major obstacles preventing them from starting to sell certified used cars from next year.

However, even if carmakers undertake the procedures for used car business registration from next month, they will have to step back instantly if the Ministry of SMEs and Startups designates used car dealers as a type of business suitable for livelihood, which would limit the entry of larger competitors.

J. S. Shin (js_shin@koreabizwire.com)

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