"Deutsche Motors, Smooth New Car Sales... Used Car Business Also Bright"

[Asia Economy Reporter Jang Hyowon] Deutsche Motors is expected to show growth this year based on its smoothly operating new car sales business and solid used car business.

According to Yuanta Securities on the 3rd, the monthly sales volume of BMW and Porsche sold by Deutsche Motors in the first quarter of this year is estimated to have increased by 23% and 67% compared to the previous quarter, with 1,100 units and 130 units respectively. Accordingly, the sales revenue of BMW and Porsche is expected to increase by 12.2% and 6.4% year-on-year to KRW 154.2 billion and KRW 285.2 billion, respectively.

Researcher Heo Seonjae of Yuanta Securities stated, "Although the global vehicle semiconductor supply issue continues, the new car allocation relatively assigned to the domestic market is increasing, so the new car sales volume of Deutsche Motors is expected to steadily increase this year as well."

The used car sector operates through the offline platform 'Deutsche Autoworld' and the online platform 'Charancha.' Researcher Heo predicted that business synergy among AS services, used car financing, and imported certified used cars will become full-fledged this year.

He analyzed, "Through Deutsche Autoworld, where 120,000 used cars are sold annually, a business foundation capable of procuring a large volume of high-quality used cars has been secured," and added, "It is expected to seek meaningful market share expansion in the domestic used car market in the future."

He pointed out that the core success factor of Deutsche Motors' used car business is the capability to procure a large volume of quality-verified used cars. He also mentioned that the online used car business is likely to shift Charancha's revenue model from simple advertising fees to vehicle sales commissions, anticipating business expansion.

He explained, "The expected performance for 2022 is sales of KRW 1.9 trillion and operating profit of KRW 67 billion, which would be increases of 12.1% and 19.1% year-on-year, respectively," adding, "The growth factors are continuous growth in new car sales focused on high-end models, increased AS demand, and synergy effects from offline platforms."

He continued, "Although the global vehicle semiconductor supply issue continues and the performance growth rate is expected to slightly slow compared to last year, considering the approximately 5,000-unit Porsche order backlog and the resolution of the vehicle semiconductor issue in 2023, the performance growth rate is expected to accelerate further from next year."