[IPO Spotlight] Auto&: Electric Vehicle Era as an Opportunity... 'Moving Office'

Started as Hyundai Motor Group's In-house Venture... Developing Genesis New Car Supplies
Expecting Rapid Growth with Launch of Proprietary Platform Moka

[Asia Economy Reporter Hyungsoo Park] Auto&?an automotive lifestyle platform company?is set to refine its platform and launch the B2C channel 'Moka' using funds raised through its initial public offering (IPO).

According to the Financial Supervisory Service's electronic disclosure system on the 16th, Auto& will issue 2,877,579 new shares to raise at least 12 billion KRW. The expected price range for the public offering is 4,200 to 4,800 KRW per share. Demand forecasting for institutional investors will be conducted over two days starting January 5 next year, after which the final offering price will be determined.

Founded in 2008 as an in-house venture of Hyundai Motor Group, Auto& spun off in 2012. The company operates two main businesses: the 'commerce platform business,' which provides products and services necessary for automotive life, and the 'product and service platform business,' which develops verified aftermarket items into finished car brand products such as new car options and new car giveaways in collaboration with automakers.

The commerce platform has built a database of approximately 20,000 automotive-related products and about 10,000 offline installation centers. Based on an O2O (Online To Offline) system linking online and offline channels, it offers a variety of automotive lifestyle products and services. New car option products developed include built-in air purifiers, vehicle protective films, and pet products for cars. Key holders, air fresheners, and cup holders for Genesis new car giveaways have also been created through Auto&.

The largest shareholder of Auto& is CEO Chanwook Choi, who will hold an 11.1% stake after the public offering. He graduated from Korea University with a degree in Mechanical Engineering in 1999 and worked for about eight years from 2000 to 2008 in Kia’s export support team. Afterwards, he worked for about four years until 2012 in Hyundai Motor’s venture business development team while preparing to start his own business. He built a platform that provides automotive products and services, moving beyond just supplying automotive accessories.

Auto& is expanding beyond automotive parts and services into various related services including finance, information, management, and transactions. Its listing on the KOSDAQ market is expected to accelerate its growth.

The funds raised will be used to enhance the platform, launch the Moka channel, and develop electric vehicle-related products. The company plans to build big data incorporating customer preferences for products and services along with environmental data such as weather, fine dust, and seasons. From January next year through December 2023, it aims to accumulate about two years of data to provide personalized services for each customer.

Settlement systems and smart easy payment solutions will also be introduced. As the number of commerce platform tenants and affiliated services increases, the workforce required for settlement tasks is growing. Automating settlement operations will reduce manpower needs and improve accuracy. The smart easy payment system will transparently manage customers’ payment histories on the commerce platform to enhance customer satisfaction and prevent disputes with offline stores.

Auto& expects more business opportunities as electric vehicle sales increase. As the automotive market shifts from internal combustion engines to electric vehicles, cars will transform from simple means of transportation to mobile spaces. Auto& is developing and manufacturing steering wheel tables, multipurpose trays, and glove box trays based on the concept of a 'mobile office.' It is also developing multi-curtains and air mattresses applying the car camping concept to solve mobile lodging needs. Hyundai Motor and Kia plan to release 23 electric vehicle models based on the E-GMP platform by 2025. To respond to this, Auto& is continuously developing electric vehicle products incorporating various mobile space concepts.

Its proprietary platform Moka is expected to provide wings for Auto&’s growth. After owning a vehicle for more than six years, maintenance costs tend to increase. Using genuine parts for every repair can be financially burdensome, which is why more vehicle owners seek competitively priced recycled parts. As of 2020, there are about 573 scrapyards in Korea producing approximately 400,000 recycled parts. With the strengthening of the Resource Circulation Act, the supply of recycled parts is expected to increase further. However, the market has been slow to activate due to offline-focused sales. Auto& is collaborating with Auto Recycle Agency, a recycled parts agency for Hyundai and Kia, to integrate an O2O system. It is creating a DIY-exclusive repair shop platform by combining about 2,000 repair partner shops using Auto&’s e-commerce system with Auto& School, applying this to Moka. Repair shops can increase facility utilization, and customers can install parts at lower costs, contributing to the growth of the recycled parts market.

Auto&’s sales have steadily increased from 26.9 billion KRW in 2018 to 31.8 billion KRW in 2019 and 49.4 billion KRW in 2020. It recorded operating losses of 1.2 billion KRW and 300 million KRW in 2018 and 2019 respectively, but turned profitable last year with an operating profit of 4.7 billion KRW.

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