Redcap Tour's Q3 Operating Profit Declines Amid Auto Semiconductor Shortage Crisis

Impact of New Car Delivery Delays Due to Vehicle Semiconductor Supply Shortage

[Asia Economy Reporter Changhwan Lee] Redcap Tour announced on the 23rd that it recorded sales of 52.8 billion KRW and operating profit of 4.4 billion KRW in the third quarter. Compared to the same period last year, sales decreased by 7.3% and operating profit decreased by 33.3%.

The decline in used car sales is identified as the direct cause of the performance drop. Sales from used car sales in the third quarter were 12.4 billion KRW, down 31.5% compared to the same period last year.

Sales from the rental car business, including used car sales, amounted to 50.3 billion KRW, down 8.3% year-on-year, and operating profit was 6.3 billion KRW, down 40.1%.

Most of the used cars sold by Redcap Tour are vehicles whose long-term rental contracts have expired, and the number of vehicles available for sale decreased in the third quarter.

This is explained by the fact that due to the shortage of vehicle semiconductors causing delays in new car deliveries, there has been an increase in cases where customers extend existing contracts instead of replacing vehicles with new ones at the time of contract renewal.

According to the Korea Automobile Manufacturers Association, domestic automobile production in the third quarter of this year recorded the lowest level since the global financial crisis. The total number of cars produced by domestic automakers in the third quarter was approximately 761,900 units, which is about 21% less than the third quarter of last year, when the industry was hit hard by the COVID-19 pandemic.

The travel business, which had been contracted due to COVID-19, continued its performance growth trend following the second quarter. The travel business recorded sales of 2.5 billion KRW and an operating loss of 1.9 billion KRW in the third quarter, reducing the deficit by 51% compared to the same period last year.

As With Corona (gradual return to normal life) approaches, major domestic companies have announced policies to expand overseas business trips one after another, moving toward normalizing work.

Redcap Tour’s major clients have also relaxed overseas business trip approval conditions that had been restricted and resumed overseas business trips for essential personnel, including holding recruitment events abroad.

Additionally, Redcap Tour explained that it is strengthening platform partnerships to expand the distribution of its business trip management solution BTMS4.0.

Last month, it signed a strategic business agreement (MOU) with Daou Technology, a leading domestic business platform company, and is currently integrating business trip management services, while also increasing contracts with new clients as dedicated travel agencies for business trips.

A company official said, "Expectations for the recovery of the travel business are growing stronger than ever in many ways."