Kia Corporation last week announced plans to launch a used car business in South Korea in November, with sales of reconditioned vehicles scheduled to start in November.
The announcement comes shortly after a similar move by Hyundai Motor, which launched the “Hyundai Certified” and “Genesis Certified” programme whereby customers can purchase used vehicles that have undergone various tests and upgrades at two dedicated centres in the country. Hyundai offers accident-free vehicles under five years old and with less than 100,000 km, which are available for purchase online on a company mobile app or website and has set a target of 5,000 sales by year-end.
Kia is putting particular emphasis on its used EVs and has introduced a five-tier grading system that also takes into account battery performance. The used vehicle business is expected to be predominantly based on internal combustion engine (ICE) vehicles in the initial stages due to much higher volumes. Kia too will only offer accident-free vehicles under five years old with less than 100,000 km.
The company has opened a dedicated service centre in Yongin, just south of Seoul, where vehicles are tested and upgrade. It aims to sell 3,000 used vehicles in the last two months of 2023 and 15,000 next year
Used vehicle retailing is traditionally seen as a lucrative, high-margin business which also helps automakers retain existing customers.
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In early 2022 the South Korean government agreed to no longer designate used car sales as a “livelihood business” that must be preserved for small enterprises and startups. The ministry of SMEs and startups thereby gave the green light to large companies to operate in the used car business – a decision that was strongly opposed by local used car dealer associations due to the overwhelming advantages carmakers such as Hyundai and Kia would enjoy in this market.