"Not a Single Car Sold This Month... Worst in 10 Years for Car Dealers"

No Incentives, Livelihood Threatened
Used Car Market Is Virtually Wiped Out

[Asia Economy Reporter Kiho Sung] "Have you heard of 'baekcha' (a car that doesn't sell even one unit a month)? This month, there will probably be countless dealers driving baekcha. I've been in this business for over 10 years, and this is truly the first time I've experienced this."

The domestic automobile sales market is struggling to recover from the deep impact of the novel coronavirus infection (COVID-19). This is due to a sharp contraction in consumer sentiment.

Dealer A at an imported car showroom in Yongsan-gu, Seoul, lamented that only three groups (five people) visited the store last weekend (the 15th). He said, "This number of visitors is only about one-third compared to a normal weekday, and on top of that, we couldn't sell any cars. If weekends are like this, it's embarrassing even to talk about weekdays."

The Daegu and Gyeongbuk regions, which were hit directly by COVID-19, are even more severe. Business owner B, who operates a domestic car showroom in Gyeongbuk, explained, "There is a Shincheonji Church, which has been in the spotlight due to this situation, right next to the showroom. The streets around the church have been completely deserted for several days."

As a result, most dealers are worried about their livelihoods. Dealers' income is mostly structured with a 'base salary' and 'incentives.' They receive a base salary of about 1 million KRW per month and then incentives per car sold. Although the rates vary by company, selling one car earns an additional 1% of the vehicle price, two cars 1.2%, and three cars 1.4%, respectively.

Professor Songbyung Kim of the Automotive Dealer Department at Daekyung University explained, "Some dealers receive up to 2 million KRW as a base salary, but most receive less than 1.5 million KRW or none at all." If a dealer cannot sell even one car and ends up driving baekcha, they have to live on a base salary of 1 million KRW for the month.

B sighed, saying, "It's hard to even say how much the pay is cut. Just know that most have been drastically reduced." He added, "The sales performance in March, when COVID-19 intensified, is even more dismal than in February."

Professor Kim emphasized, "While new car dealerships are in a worrisome situation, the used car sales market is almost completely devastated. Given various conditions, it is difficult to guarantee recovery within this year, and if the situation prolongs, the slump may continue into next year, so preparations are necessary."

This content was produced with the assistance of AI translation services.