Minister Kwon Chil-seung: "Designating Used Cars as Livelihood Type Is Not Easy... Mediation for Coexistence Is Realistic"
Minister of SMEs and Startups nominee Kwon Chil-seung is attending the confirmation hearing held at the National Assembly on the 3rd, drinking water as if feeling anxious. Photo by Yoon Dong-joo doso7@
[Asia Economy Reporter Kim Heeyoon] When Hyundai Motor announced its intention to enter the used car market last year, the used car industry strongly opposed it. The used car sales business was designated as a "small and medium-sized enterprise (SME) suitable industry" by the Win-Win Growth Committee, but the designation expired in 2019, allowing large corporations to enter the market. However, used car sales industry organizations such as the Korea Automobile Sales Business Association Federation (Korea Federation) have continued their opposition protests, demanding the re-designation of the used car sales business as a livelihood-type suitable industry, opposing Hyundai Motor and Kia's entry into the used car market, and protecting the livelihood-type jobs of small business owners.
The Ministry of SMEs and Startups, the relevant authority, is now in a position where it cannot side with either party. Some argue that while the ministry is hesitating due to public opinion, reverse discrimination in the domestic industrial structure is intensifying.
At the confirmation hearing held on the 3rd, Kwon Chil-seung, the new Minister of SMEs and Startups, stated, "It is difficult to predict whether the used car sales business will be designated as a livelihood-type suitable industry," and added, "Assuming it is not selected as such, mediating the protection of the weak and win-win methods might be the practical approach for the ministry." This is interpreted as meaning that preparing a win-win plan is the only realistic alternative. Former Minister Park Young-sun also attempted to mediate conflicts between large corporations entering the used car market and the used car sales industry but was unable to conclude the matter.
The Ministry of SMEs and Startups is preparing a review committee for the designation of the used car business as a livelihood-type suitable industry while simultaneously working on a win-win mediation plan. The review committee is an independent structure composed equally of experts and industry representatives without government participation. The designation of a livelihood-type suitable industry must be decided after the committee's resolution, followed by designation and announcement by the minister, but currently, the possibility of additional designation as a livelihood-type suitable industry is low.
Used car sales organizations appeal, "At the time when electric vehicles are becoming popular, the approximately 300,000 used car dealers need a grace period to adapt to industry changes, so we requested a five-year grace period," and they plead, "Please block large corporations from entering the used car market until 2025."
Earlier, the completed car industry proposed a win-win plan limiting the scope of used car business entry to certified used cars (6 years, 120,000 km), with phased market entry and market share caps. In December last year, the Korea Federation and the National Automobile Sales Business Association Federation held their first meeting with completed car manufacturers to derive a win-win plan, but it ended without results, only confirming differences in positions.
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