K Car, Next Year's Used Car Market Keyword: 'Double COW'

"Demand for Eco-Friendly Cars Increases, with Higher Proportions of 4050 and Women"

[Asia Economy Reporter Kim Ji-hee] Directly operated used car company K Car has selected ‘Double COW’ as the core keyword for 2021. Based on used car sales data this year, six keywords were presented to predict the used car market trends: the high purchasing power of the 4050 generation (Central of Age), the expansion of the contactless life 'O2O' trend, and the increase in female customers (Women), among others.

The first keyword is the expansion of demand for urban eco-friendly mobility (City Car). K Car forecasted that consumer demand for eco-friendly cars will increase. Amid strengthened environmental policies such as diesel vehicle entry restrictions in city centers and reduction of diesel vehicles, the proportion of gasoline cars is rising. This year, gasoline cars accounted for 60.9% of all vehicles sold by K Car. Even in the sports utility vehicle (SUV) segment, which is mainly diesel, the sales share of gasoline models increased by 4 percentage points compared to the previous year.

Hybrid vehicle sales also expanded by about 12% compared to the previous year. Electric vehicle sales increased by a remarkable 37% compared to 2019. Thanks to low maintenance costs and various tax benefits, demand for electric vehicles is expected to grow further. In particular, next year, various new electric vehicles such as Hyundai Ioniq 5, Genesis eG80, Mercedes-Benz EQS, and EQA are expected to be released, which is anticipated to continue the enthusiasm in the used car market.

An increase in the proportion of the 4050 generation (Central of Age) is also expected. The 4050 generation, which has the highest purchasing power, accounted for 45.4% of all K Car customers this year, an increase of about 3% compared to last year. Due to increased hobbies and leisure activities of the 4050 generation, there has been a rise in demand for used SUVs or minivans as second family cars. Looking at the sales share by vehicle type this year, SUVs ranked first with 23.9%. The minivan Carnival ranked 9th among best-selling models.

The ‘O2O (Online to Offline) home service trend’ triggered by the COVID-19 pandemic is also expected to continue. According to the analysis of usage of ‘Naechasagi Home Service,’ a non-face-to-face online purchase service first introduced by K Car in the industry, the proportion of home service usage among total purchases this year reached 35%. On weekdays when visiting stores is difficult, the online purchase ratio even exceeded 50%.

Along with O2O services, online payment for used cars (Online Payment) is also expected to become more active. Previously, when purchasing used cars non-face-to-face, customers had to visit stores directly for payment or input payment information through calls with consultants, which caused inconvenience during the payment process. In March this year, K Car introduced a ‘24-hour customized instant payment’ system to address the shortcomings of the existing system. According to K Car’s payment data analysis, after the introduction of the customized instant payment system, about 20% of payments were made online by customers themselves without consultant assistance. Among them, about 45% of customers in their 30s purchased used cars via instant payment, showing very active online shopping behavior.

The continuous increase of female customers (Woman Power) in the used car market is also notable. The proportion of female customers among K Car buyers has steadily increased, reaching 23.4% this year, about 13% higher than last year. This is attributed to the rise in women’s economic power, the increase in households owning second cars, and the active use of home services.

The best-selling domestic cars chosen by female customers this year were the All New Morning, Spark, The Next Spark, Avante AD, and Ray, showing a clear preference for compact cars and subcompact cars that are generally easy to drive and have low maintenance costs. K Car expects the proportion of female customers in the used car market to exceed 25% next year.

The use of in-house quality warranty services (Warranty) when purchasing used cars is also expected to expand further. An analysis of the usage status of K Car’s extended quality warranty service ‘K Car Warranty (KW)’ showed that 41.8% of all customers purchased the K Car Warranty. This is more than four times the subscription rate (10%) at the time of service launch. Consumers seem to use the quality warranty service to alleviate concerns about repair costs after purchasing used cars or anxiety about using O2O services.

Jung In-guk, CEO of K Car, said, “This year, many customers looking to purchase good quality and reasonably priced used cars visited K Car, and interest in online purchases was higher than in any other year due to the COVID-19 pandemic.” He added, “In the Year of the Ox, we will complete an online shopping environment where anyone can easily and safely purchase used cars and set new standards for used car transactions.”

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