Effective January 1 Next Year
Prevention of Private Use of Supercars
Concerns Over 'Blind Spots' Among Some
Starting January next year, 'light green license plates' will be attached to corporate passenger cars priced over 80 million won. This policy aims to prevent the private use of high-priced vehicles purchased through corporate leases, but there are still blind spots, leading to doubts about the policy's effectiveness.
On the 2nd, the Ministry of Land, Infrastructure and Transport announced that it will publicly notify the revision of the "Standards for Vehicle Registration Plates, etc." for the introduction of exclusive license plates for corporate passenger cars until the 23rd and plans to implement it on January 1 next year.
The introduction of exclusive license plates for corporate cars was also a campaign pledge and national task of President Yoon Seok-yeol.
The so-called 'corporate supercar' issue is not new. The problem of purchasing or leasing expensive foreign cars under corporate names and then privately using them by company owners or their families has been continuously pointed out.
In fact, cases of foreign luxury cars being registered as corporate cars are very common in Korea. From January to May, corporations purchased 9,118 ultra-luxury imported cars priced over 150 million won, a 19% increase compared to the previous year. During the same period, the total sales of imported cars in Korea decreased by 4%.
Moreover, corporate cars can receive tax benefits of up to 15 million won annually for expense processing. Although private use of corporate cars can be subject to charges such as embezzlement or breach of trust, it is difficult to monitor each case individually. The exclusive license plate for corporate cars was intended as a measure to block such problems.
Only Applicable to Vehicles Priced Over 80 Million Won... Doubts About Practical Effectiveness
Light green corporate vehicle license plates to be applied from next year. [Image source=Yonhap News]
However, there are voices expressing skepticism about the practical effectiveness of the exclusive license plate policy to be implemented next year.
First, the new system targets vehicles priced over 80 million won. Many corporate cars priced below 80 million won will be excluded, creating a 'blind spot.'
While it may prevent 'supercars' worth several hundred million won, most imported luxury cars listed in the compact or used car markets may circumvent the system. Regarding this, the Ministry of Land, Infrastructure and Transport explained, "The purpose of the pledge is to prevent private use of high-priced corporate cars," and "We based it on the average price range of large passenger cars that the public generally recognizes as luxury vehicles."
Also, the system applies only to vehicles registered from January 1 next year. There are concerns about a 'balloon effect,' where the number of corporate car registrations may surge in the second half of this year to avoid the new license plates.
However, the ministry's judgment is that since corporate cars are usually replaced every 3 to 4 years, the new license plates can be applied at the time of vehicle replacement.
The Best-Selling Corporate Car This Year Is the 'Grandeur'
This year, the best-selling model under corporate names in Korea is Hyundai Motor Company's Grandeur. The full-option price is about 60 million won.
According to Kaizyu Data Research Institute, the top 10 domestic corporate car models sold from January to August this year totaled 34,050 units, a slight increase of 3.4% (1,109 units) compared to 32,941 units during the same period last year.
The best-selling model is Hyundai's representative sedan, the Grandeur, with 5,619 units sold exclusively to corporations. The seventh-generation Grandeur, which returned in November last year, also ranked first in overall sales including private sales with 82,760 units sold, averaging over 10,000 units per month.
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