'Used Car Sales Business' Referred to Livelihood-Type Suitable Industry Deliberation Committee... Full Review to Begin Next Month

Used car market in Janghanpyeong, Dongdaemun-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Lee Junhyung] The Committee for Designation of Suitable Livelihood Businesses will review whether the used car sales industry should be designated as a suitable livelihood business starting next month.

The Ministry of SMEs and Startups announced on the 30th that it officially requested the Committee for Designation of Suitable Livelihood Businesses to hold a meeting to review the designation of the used car sales industry as a suitable livelihood business. The committee chairperson decided to convene the committee in accordance with the Enforcement Decree of the Special Act on Designation of Suitable Livelihood Businesses for Small Business Owners. Under current law, the chairperson must convene a meeting without delay if the Minister of SMEs and Startups or at least one-third of the committee members request it. Considering the preparation period and participants' schedules, the committee meeting will be held in the second week of January next year.

Previously, the used car sales industry has been under controversy for about three years since February 2019, when used car organizations such as the National Automobile Sales Business Association Federation and the Korea Automobile Sales Business Association Federation applied for designation as a suitable livelihood business. The used car industry demanded designation as a suitable livelihood business, arguing that the entry of completed car manufacturers into the used car market would cause significant damage. On the other hand, large completed car manufacturers pushed for market entry, citing modernization of the used car market, improvement of consumer welfare, and fairness with imported car companies. The majority of consumers support the entry of large completed car manufacturers into the used car market to open up the used car market.

Before taking legal measures, the Ministry of SMEs and Startups sought ways for the used car industry and completed car industry to coexist. Accordingly, the ministry made dozens of contacts with both industries, made mediation efforts, created a coexistence plan, presented it to both sides, and worked to reach an agreement. In June of this year, it also launched the Used Car Sales Industry Development Council in cooperation with the Democratic Party’s Euljiro Committee and the Ministry of Land, Infrastructure and Transport. The council is a consultative body involving the Ministry of SMEs and Startups, the Ministry of Land, Infrastructure and Transport, the Euljiro Committee, the Automobile Industry Association, and both the completed car and used car industries.

The consultative body reached partial agreements such as the phased entry of completed cars into the used car market but ultimately failed to finalize negotiations in September. Based on the council’s discussions, the ministry attempted a final mediation at the end of last month but failed to reach an agreement. Despite these efforts, the breakdown of coexistence discussions led the ministry to decide that it had no choice but to proceed with the review under relevant laws and requested the convening of the committee, the ministry explained.

Meanwhile, the committee consists of 15 private members including the chairperson. To ensure fair deliberation, it is composed of eight members recommended by small business, SME, mid-sized enterprise, and large enterprise organizations (two each), two members recommended by the Win-Win Growth Committee, and five public interest members. The committee’s role is to review and decide on the designation of suitable livelihood businesses.