Used cars parked at dealerships in Janganpyeong, Seoul, South Korea’s largest secondhand car market (File photo by Sol Lee)
South Korea’s used car sellers aim to take advantage of the slowing economic growth at home and abroad to expand their market shares.
Lotte Rental Co., the leading domestic car rental firm, established its first overseas secondhand vehicle selling unit in the United Arab Emirates (UAE) to ramp up exports while planning to launch a business-to-customer (B2C) pre-owned car platform in October, according to industry sources in Seoul on Sunday.
K Car Co., South Korea’s top used car retailer, is set to open its third auction house for secondhand vehicles in the second half.
That came as more customers looked for used cars than new ones amid an economic slowdown.
South Korea’s new car registrations fell 10.4% to 819,742 units in the first half from a year earlier, while transactions of pre-owned vehicles dipped only 1.7% to 1.2 million units, according to Seoul-based researcher Carisyou.
LOTTE AUTO GLOBAL
Lotte Rental has been shipping used cars to overseas markets since the company founded a secondhand vehicle brand Lotte Auto Global in 2019. Its used car exports business enjoyed a compound annual growth rate (CAGR) of 107.2% in the last five years.
The company set up Lotte Auto Global Middle East FZE in Dubai last week as the Middle East accounted for some 90% of about 4,600 used cars it exported last year.
Lotte Rental aims to expand its markets not only in the Middle East but also in North Africa and the Commonwealth of Independent States (CIS), a regional intergovernmental organization in Eurasia formed following the dissolution of the Soviet Union in 1991, through the UAE unit.
Lotte Rental will launch an online used car B2C platform in October to sell 130,000 pre-owned vehicles and generate sales of 2.3 trillion won ($1.7 billion) by 2028.
K Car’s used car auction house in South Korea (File photo by K Car)
OFFLINE AUCTION HOUSES
K Car is reportedly poised to open its third used car auction house in the Gyeongsang region, the Southeast area of the Korean peninsula.
The company currently operates two auction houses in Osan and Sejong with display capacities of 1,200 vehicles and 600 cars, respectively, about 35 kilometers (22 miles) and 121 km south of Seoul.
K Car’s sales rose 16.5% to 589 billion won in the second quarter after enjoying a record revenue of 604.4 billion won in the first thanks to those auction houses.
Sales volume at those facilities excluding used cars on consignment grew 10.9% to 9,492 units in the April-June period.
The average successful bid rate at the K Car auction houses stood at around 80%, over 20 percentage points higher than the average rate compiled by the Korea Auto Auction Association.
By Jung-Eun Shin
newyearis@hankyung.com
Jongwoo Cheon edited this article.
