[Featured Stocks] Allowing Large Companies to Enter the Used Car Market... K Car and Auto& Surge

[Image source=Yonhap News]

[Asia Economy Reporter Myung-hwan Lee] With the entry of large corporations into the domestic used car market now permitted, stocks related to used cars have surged sharply since the early trading session on the 18th.

As of 9:20 AM on the same day, K Car is trading at 35,150 KRW, up 16.20% (4,900 KRW) from the previous trading day. At the same time, Auto& is trading at 17,850 KRW, a sharp increase of 23.10% (3,350 KRW) compared to the previous day.

This strong performance is interpreted as a result of the allowance for large corporations to enter the domestic used car market. The Ministry of SMEs and Startups decided at the 'Used Car Sales Business Livelihood-Type Suitable Industry Deliberation Committee' held the day before not to designate the used car sales business as a livelihood-type suitable industry. Accordingly, domestic finished car large corporations such as Hyundai Motor and Kia Motors now have the opportunity to enter the used car market.

The committee explained the reason for not designating it as a livelihood-type suitable industry, stating, "(Used car sales) have a smaller proportion of small business owners compared to the entire service industry, wholesale and retail trade, and automobile and parts sales industries, have higher average annual sales per small business owner, and a smaller proportion of unpaid family workers," adding, "It does not meet the 'small scale' criterion among the designation requirements."

The securities industry analyzed that this decision will have a positive impact on the used car industry. Kim Min-seon, a researcher at Kiwoom Securities, said, "Efforts to resolve information asymmetry, such as the introduction of certified used cars across the industry, will increase, and online sales are expected to expand," adding, "Structural growth of the domestic used car market is anticipated."

Kim Ji-woo, a researcher at Korea Investment & Securities, predicted, "Although K Car is expected to see a decrease in used car inventory secured through Hyundai and Kia dealerships, it will benefit as a dominant market player if the online used car market grows due to the entry of large corporations."

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