"Consumer Protection" vs "Monopoly Concerns"... Heated Debate Over Complete Car Manufacturers Entering Used Car Market

Public Hearing of the National Assembly Industry Committee on the 7th

Used car market in Janghanpyeong, Dongdaemun-gu, Seoul (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] “The transaction volume of the used car market is growing every year. The official annual sales amount reaches 10 trillion won, and the annual sales volume is 2.5 million units. It is hard to say that it is small-scale compared to other industries. Nevertheless, since consumer distrust toward the used car market is severe, consumer protection should now take priority over used car companies.” (Kim Juhong, Executive Director of the Korea Automobile Industry Association)

“Unlike imported cars that operate used car businesses through dealers, Hyundai Kia Motors monopolizes vehicle production and sales. This monopolistic structure raises concerns about increasing the burden on consumers.” (Lim Jaegang, Chairman of the Daejeon Jungbu Automobile Sales Business Association)

The entry of finished car manufacturers into the used car market sparked intense disputes between the domestic finished car industry and the used car industry. The finished car industry argued that the lock on the used car sales business should be lifted, citing the need for consumer protection and industrial competitiveness, while the used car industry countered that it could lead to a monopolistic position across the entire industry.

At the 'Public Hearing on Large Corporations Entering the Used Car Market' hosted by the National Assembly’s Industry, Trade, Energy, Small and Medium Enterprises Committee on the 7th, the finished car industry and the used car industry showed sharp differences in opinion. Attendees included Kim Juhong, Executive Director of the Korea Automobile Industry Association; Lim Jaegang, Chairman of the Daejeon Jungbu Automobile Sales Business Association; Lim Gisang, Representative of the Citizens' Coalition for Using Cars for 10 Years; and Jung In-guk, CEO of K Car.

Representing the finished car industry, Executive Director Kim emphasized, “The domestic used car market size is 1.3 times that of the new car market, and the number of companies and sales per company are also increasing. In the U.S., Germany, and France, the used car market is 2 to 3 times the size of the new car market, so the domestic market has higher potential than overseas.” Currently, Hyundai and Kia, among domestic finished car manufacturers, have already entered the used car business in 38 and 31 countries overseas, respectively.

However, Executive Director Kim pointed out that consumer distrust is hindering the growth of the used car market. He said, “The biggest problem in the used car market is distrust. Quality reliability is low, and innovation is lacking. If a healthy structure is created through competition among various used car market operators, consumer trust can be restored, and qualitative growth of the used car market can be promoted.”

Kim added, “As the automobile industry itself is shifting toward mobility services, securing data throughout the entire automobile lifecycle is becoming very important. If finished car manufacturers enter the used car market and secure such data, they can collaborate in new fields such as finance, insurance, and sharing, thereby creating new added value and jobs.”

He also raised concerns about reverse discrimination against domestic finished car manufacturers compared to imported cars, which can conduct certified used car businesses. He argued that domestic finished car manufacturers should at least be allowed to operate certified used car businesses like imported cars. Kim said, “Thirteen imported car brands are continuously expanding their market share by managing customers and quality through certified used car businesses. On the other hand, domestic finished car manufacturers have weaker competitiveness in the used car market due to restrictions on market entry and are not managing their customers well.”

In response, the used car industry rebutted that even overseas, finished car manufacturers do not directly sell used cars. CEO Jung said, “Direct entry by finished car manufacturers could cause monopolies not only in the used car market itself but also across upstream and downstream industries, and other participants could become subordinate, risking ecosystem collapse. In the U.S., there are many successful used car dealers, but none are related to large automobile manufacturers.”

Regarding the coexistence plan that limits listings to vehicles “within 6 years of age and 120,000 km mileage,” skepticism was also expressed. Chairman Lim pointed out that Hyundai offers a “5-year/100,000 km” warranty when purchasing a new car, saying, “Ultimately, the used car industry will only handle accident-damaged cars or cars with high mileage, which will further increase consumer distrust. If they truly care about consumer welfare, Hyundai should guarantee vehicles older than that and verify durability and other factors.”

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