ED Carmaker's business expansion

Used car market entry plan faces opposition from dealers

Hyundai Motor has announced a plan to enter the used car market despite strong opposition from existing secondhand car dealers. This marks the first time that the nation's largest automaker has unveiled a concrete plan for the business.

Hyundai said it will only sell high-quality certified used cars that have been driven less than 100,000 kilometers and owned for less than five years. The vehicles to be sold must undergo inspections with a checklist consisting of 200 key areas for evaluation. The company also plans to establish a high-tech center to tune up used cars before selling them.

In order to break the information monopoly held by sellers in the used car market, Hyundai will set up an online portal to provide comprehensive information on the vehicles up for sale. The company will also introduce a trade-in program in which Hyundai purchases used Hyundai cars from customers and offers discounts when they buy new Hyundai models.

Given that Korea is the only country in the world that bars carmakers from entering the secondhand car market, Hyundai's entry could set the stage for a reliable trading system to be put in place in the used car market where transparency is traditionally low. However, significant hurdles still remain ahead for Hyundai as the government's decision on whether or not to open the used car market to automakers will not be made until next week.

Existing small- and medium-sized dealers are reacting angrily, saying Hyundai's entry will drive them out of business. To allay their concerns, Hyundai said it will limit its market share to 2.5 percent this year, to 3.6 percent in 2023 and to 5.1 percent in 2024. But if carmakers are allowed to make inroads, overall trust in the market will increase, which would in turn prompt a spike in demand for used cars. Hyundai should abide by its voluntary restraint promise faithfully. It's time to consider allowing car makers to deal in used cars.