Online car market becomes new sales channel
Used car dealers have been aggressively selling cars online for years. Korea Times file
By Yi Whan-woo
An online platform specialized in both brand-new and used car sales is gaining some momentum in Korea.
But the rising popularity of online platforms hasn't necessarily boosted online vehicle sales, as the vast majority of Korean people still purchase vehicles in person.
However, after Tesla succeeded in its online sales experiment to cut prices, the online market is increasingly becoming a new sales channel for carmakers. It's still too early to say that online channels are drawing significant attention, but more foreign carmakers in Korea are actively using online platforms to promote vehicle sales.
GM Korea will sell its electric vehicle (EV), the Chevy Bolt EUV, only on the internet from Wednesday, becoming one of the earliest car manufacturers in Korea to offer sales online only. The Korean affiliate of the U.S. carmaker organized a livestreaming event last week on Naver Shopping Live, an e-commerce platform, with the presence of celebrities and automotive columnists.
Among foreign brands active here, BMW has been selling limited-edition models online since 2019, while German carmaker Mercedes-Benz plans to launch an online sales platform. Swedish automotive giant Volvo plans to sell its EVs exclusively online in coming years.
Whether the country's top carmaker Hyundai Motor Group follows suit is the central factor in terms of expanding online vehicle sales. Still, despite recent growth, the online car market is facing a few hurdles before it becomes truly mainstream in Korea.
Fierce opposition from unionized workers is cited as the top reason faced by Hyundai Motor Group.
“This is because the unionists include salespeople at dealers directly run by the conglomerate,” a Hyundai Motor representative said, suggesting that salespeople may suffer if the firm allows online sales.
Hyundai Motor may go for online sales of its upcoming SUV being produced in cooperation with the Gwangju municipal government.
The city government has management rights as it provided the land used for the production of the tentatively named Casper, which will be Hyundai's smallest SUV ever.
“Under the circumstances, Hyundai may need to consult Gwangju officials in their joint sales campaign,” an industry source said.
Meanwhile, dealers selling used vehicles have been more aggressive when it comes to online sales.
Some 43.1 percent of online purchases in the first half were made with buyers relying solely on information provided by dealers' websites and not by viewing the vehicle in person as they did in the past, according to K Car, an internet market platform for used cars.
This percentage is up from 34.6 percent in the same period in 2020. Year-on-year sales using the internet also increased by 49.3 percent, K Car added.