Changes in the Used Car Market: Who Are the Beneficiaries?

[Image source=Yonhap News]

[Asia Economy Reporter Junho Hwang] Samsung Securities estimates the size of the domestic used car sales market to be approximately 29 trillion KRW, and on the 27th, it forecasted that attention should be paid to Lotte Rental, K Car, and Heydealer (unlisted) as the used car export market and domestic used car distribution network improve in the future.

Samsung Securities estimated the size of the domestic used car market to be about 29 trillion KRW. According to last year's Ministry of Land, Infrastructure and Transport's transfer registration statistics, the number of used car transactions was 2.6 million units, and by multiplying this by a conservative average selling price of 10 million KRW, the domestic used car market can be summarized as approximately 29 trillion KRW.

The growth of the used car industry may not be significant. However, there may be business opportunities for existing or newly entering companies to secure growth and profitability. Business opportunities such as the used car export market and improvements in the used car distribution network could become major growth drivers within the industry in the future.

In particular, Samsung Securities highlighted the fact that in March, the Small and Medium Venture Business Administration's Committee on Suitable Industries for Livelihood approved large corporations' entry into the used car retail business. Although the entry timing of large corporations such as Hyundai Motor and Kia Motors into the used car market has been postponed to May next year, it is expected that the used car market size will grow to about 35 trillion KRW by 2026 due to the entry of large corporations.

Researcher Changhee Lee of Samsung Securities stated, "Even if large corporations enter the used car retail market, the impact on the market will not be significant, and rather, the trust increase due to the entry of large corporations could further activate transactions in the domestic used car market," adding, "In conclusion, the entry of large corporations into the used car market will be a good opportunity to establish a virtuous cycle structure for the entire market, and furthermore, it is expected to have a positive effect on the used car export market as well."