이 기사는 2022년 03월 16일 07:39 thebell 에 표출된 기사입니다.

South Korea’s Hyundai Motor has announced details of its used-car business plan, one and half years after the automaker first unveiled its intention to enter the market, pledging to enhance customer rights and achieve shared growth with smaller competitors.

The announcement, released on March 7, comes after the carmaker filed a used-car business license in Yongin, Gyeonggi Province, earlier this year. The move is in line with the December declaration by Jeong Man-ki, chief executive of Korea Automobile Manufacturers Association, on behalf of the country’s automakers that they will move to enter the used-car business starting from January of this year.

Hyundai Motor said it would only sell its vehicles that are less than five years old and have less than 100,000 kilometers. It plans to build a high-tech center dedicated to assessing quality of pre-owned cars and introduce a certification system.

“The plan shows what our used-car business will be like. We are preparing for the business step by step,” a Hyundai Motor official said.

However, the company did not give any details about a timeline as its entry to the market is subject to approval from the country’s small and medium enterprises (SMEs) ministry. The ministry’s decision to include the used-car market in the list of businesses protected for the livelihood of small business owners would force the automaker to scrap the plan.

A committee was recently created upon request from the SMEs ministry to deliberate on this matter in accordance with the relevant law. It is set to hold a meeting on Thursday.

The art of timing

What is notable is that Hyundai Motor released its used-car business plan just ahead of the committee meeting. This is apparently aimed at getting support from the public, which could create a positive backdrop for the company, industry watchers said.

Expanding consumers’ right of choice was one of the reasons cited by Hyundai Motor for its entry into the market. Consumer reaction has been generally positive, with hopes that the company’s used-car business could help improve market transparency by reducing information asymmetry between sellers and consumers.

“Hyundai Motor’s announcement suggests it is ready for the used-car business and only waiting for a nod from the government,” an industry insider said. “It also reflects the company’s confidence of getting approval.”

Hyundai Motor’s plan is also focused on co-existing with existing used-car retailers. The automaker said it would voluntarily limit its market share to 2.5% in 2022, 3.6% in 2023 and 5.1% in 2024.

The numbers were based on what was discussed between representatives from the new and used-car industries last year. They at the time agreed to limit the overall market share of the country’s automakers to 5% in 2022, 7% in 2023 and 10% in 2024, although they failed to reach a final agreement.

An official from the SMEs ministry said the committee’s deliberation and decision will be independent, adding that it is uncertain whether a final decision will be made at Thursday’s meeting.

The committee was formed after the talks between the new and used-car industries ended with no results late last year. It comprises 15 members including those representing small merchants, mid-sized firms and large conglomerates. (Reporting by Su-jin Yoo)