"Car Life Cycle Services Are the Trend... Korea Must Hurry to Open the Used Car Market"

KAMA Holds Meeting with U.S. Franchise Dealers on Used Car Sales

[Asia Economy Reporter Yu Je-hoon] As the domestic used car market is about to open, the Korea Automobile Manufacturers Association (KAMA) visited the U.S. used car sales industry to assess the situation. Jeong Manki, chairman of KAMA, stated, "While the global automobile industry is evolving into a competition for 'vehicle life cycle services,' Korea must not go against the global trend," adding, "Complete car manufacturers should also hasten their entry into the used car market, and the government needs to actively support this."

According to KAMA on the 10th, Chairman Jeong visited South Bay Lexus in Los Angeles (LA), California, on the 7th, holding a meeting with CEO Michael Hong and company executives. South Bay Lexus is a local franchise dealer operated by Korean Americans.

In the U.S., used car sellers are classified into ▲ franchise dealers ▲ independent dealers ▲ brokers. Among these, franchise dealers differ from independent dealers or brokers in that they are responsible for safety and quality management throughout the vehicle's entire life cycle after the sale, effectively functioning as 'directly managed stores.'

CEO Hong emphasized that the participation of complete car manufacturers in the used car market greatly expands consumer benefits. He explained, "From the consumer's perspective, there are four benefits: diversity of sellers and increased benefits from their competition, management of used car history, trade-in transactions, and certification/warranty."

In fact, with the entry of complete car manufacturers (franchise dealers), consumers can enjoy various services due to the participation and competition of diverse sellers such as independent dealers and brokers. Additionally, the vehicle history information operated by franchise dealers helps resolve information asymmetry issues when purchasing used cars. Furthermore, franchise dealers provide services such as free repairs similar to new cars, financial programs, and emergency dispatch services under the headquarters' guidelines.

Moreover, CEO Hong explained that entering the used car market is a decisive factor in the competitiveness of complete car companies. As the scope of competition for global complete car companies expands from traditional new car sales to 'new car sales-parts sales-repair and maintenance services-vehicle history management-used car sales' covering the entire life cycle, any company lacking even one of these may be eliminated from the market.

In fact, in the global complete car industry, the capability to collect and accumulate data for various situations throughout the vehicle life cycle is emerging as a core competitive factor. Even for vehicles with the same design, identifying and innovating performance and functional issues that vary by season, weather, and region is crucial, and used car sales can be central to this data collection.

Chairman Jeong stated, "As the global automobile market evolves into competition for vehicle life cycle services, if Korea alone goes against this trend, our companies may fall behind in global competition," adding, "Considering that domestic consumers may face reverse discrimination compared to imported cars by not receiving services from domestic complete car manufacturers equipped with capabilities for vehicle sales timing and subsequent driving history information, genuine parts, and maintenance services, complete car manufacturers should hasten their entry into the used car sales market, and the government should actively support this."

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