K Car Reports 517.7 Billion KRW in Q1 Revenue: "Growth in Scale and Profitability"

On the 4th, K Car announced that its preliminary first-quarter business results (based on K-IFRS consolidated financial statements) recorded sales and gross profit of 517.7 billion KRW and 52.4 billion KRW, respectively. Despite the ongoing global economic downturn, these figures represent increases of 13.5% and 14.5% compared to the previous quarter.

Sales increased as used car sales recovered. In the first quarter, K Car's total sales volume was 37,211 units, a 21.9% increase from 30,519 units in the previous quarter. This growth rate is about twice that of the used car market, which rose 11.8% quarter-on-quarter to 672,000 units during the same period.

The increase in K Car's sales volume was mainly driven by the growth of the online purchase service, ‘Naechasagi Home Service’. In the first quarter of this year, 16,898 direct-sale used cars were sold through Naechasagi Home Service, a 36.7% increase from 12,359 units in the previous quarter. This accounts for 57% of total retail sales in the first quarter.

Along with sales growth, profitability also recovered. This was due to changes in the inventory portfolio focusing on vehicles with high turnover rates and improvements in the purchase channel mix prioritizing more profitable channels. As a result, the retail per-unit margin rate (GPU) rose by 0.2 percentage points quarter-on-quarter to 8.8%, and the gross profit margin increased by 0.1 percentage points quarter-on-quarter to 10.1%, marking three consecutive quarters of growth for both metrics.

The quality assurance extension service ‘K Car Warranty (KW)’, which has been growing since the service revamp in the fourth quarter of last year, also contributed to profitability improvement. K Car made major changes including ▲expanding the warranty coverage ▲extending the warranty period up to 24 months ▲lowering service prices by vehicle type ▲and securing a professional maintenance network through a partnership with Samsung Fire & Marine Insurance’s Anycar Land. Following these changes, the proportion of K Car Warranty subscribers in the first quarter increased by 38% quarter-on-quarter to 53.6%.

Jung In-guk, CEO of K Car, stated, “Although the uncertain macro environment continues, K Car will focus on profitable growth by actively leveraging the economic moat it has built over 23 years in the used car market.”

Listed on the KOSPI market in October 2021, K Car is the largest direct-sale used car platform company in Korea with 23 years of experience. It operates a direct-sale system where vehicles purchased directly are sold directly, and offers the e-commerce service ‘Naechasagi Home Service’ based on the largest nationwide network of over 40 direct-sale locations.