German automakers are strengthening their respective used car businesses in South Korea as demand for their luxury brands continues to soar and as the number of cars in circulation increases.
According to data released by the Korea Automobile Importers Association, BMW, Mercedes-Benz and Volkswagen group sold a combined 52,278 new cars in South Korea in the first six months of 2014, a 33.1% increase on the 39,267 units sold in the same period of last year.
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This was more than half of the total foreign brand sales in the country in this period.
Mercedes-Benz, which already has a used car showroom in the country’s capital city Seoul, is starting to sell other used luxury brands while Volkswagen group plans to start up its in-house used car business in September. BMW began its used car business in South Korea in 2005 but said it plans to increase its used car floor-space in the country.
In the luxury segment, the used car business is seen as an integral part of the overall dealer service and is often the most profitable segment for local dealers. New buyers often trade in their used cars at guaranteed buy-back prices while used car buyers are offered warranties and other quality guarantees.
Controlling the used car market also helps underpin the value of the brand.
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By GlobalData
