Park Jin-hai primarily focuses on K-dramas, entertainment shows and actor interviews. Beyond that, she also pens articles covering the broader arts scene, with a particular emphasis on classical music, dance and various aspects of lifestyle. Since joining The Korea Times in 2013, she has made significant contributions in the realms of hallyu (Korean wave), industry news and international affairs.
Lotte lags behind startup in car-sharing business
By Park Jin-hai
Lotte Rental gave its top position to a startup company in the car-sharing business.
After the acquisition of KT Rental in March, the company designated the car-sharing business as one of its core growth engines.
However, its car-sharing unit Green Car’s business is in the red.
Currently, the former industry leader with the highest number of memberships and cars in operation has slipped to second-place after Socar, while its business is eroding its assets.
Lotte Rental bought Green Car in October 2013 and has been ranked as the top player in car rental business, having 30 percent more members than the second player, Socar.
While its rival Socar, after the injection of an 18 billion won investment from a private equity fund, Bain Capital, in October, has been expanding its presence fast, Green Car’s business virtually stopped growing.
Green Car recently notified the stock market that it has fallen into a financial state where its assets have been eroding from the first quarter of this year. Its debt-to-equity ratio soared to 735 percent.
“While other operators enter the market and enforced their businesses, we couldn’t expand our business because we were on the process of changing hands,” said a Lotte Rental official.
As of last month, Green Car’s membership was 650,000, while that of Socar reached 850,000. Regarding the number of cars in service and car-sharing zones Green Car lagged behind its competitor. Green Car had 2,000 cars in operation, while Socar had 2,900 cars. The company had 1,250 car-sharing zones, less than Socar’s 1,500 sharing zones.
To have synergy with Lotte’s existing business, Lotte Rental tried to make partnership with Lotte Mart outlets, which numbers nearly 100 throughout the country, to use the latter’s parking spaces. But, it faced opposition as well, because it is difficult to keep those parking spaces open 365 days and 24 hours.
Industry watchers are concerned that Lotte Rental, for which Lotte paid more than 1 trillion won to buy KT’s rental unit, might weigh on the Lotte group, which should invest additionally on the fragile business, before it creates synergy with Lotte’s existing businesses.
“We recently made a contract with Hi Mart. Their 20 Green zones offer car-sharing services. The negation with Lotte Mart is still an ongoing one that we hope to expand service areas further in the future,” said the official.