Korean Used Car Market Undergoing Makeover

The Korean Times reported that the used car market is undergoing a potential transformation aiming at economy of scale.

Large size secondhand car dealers have sprung up countrywide to compete with groups of small traders that have formed a sales complex.

The new firms have provided customers with not only brokerage services but also automobile checkup, insurance, warrant and after-sales services.

According to industry sources, a terminal operator Shinaju made an inroad into the market and established Jamycar, an enterprise type dealer earlier this month.

The new body runs the country's biggest exhibition hall covering 4,500 pyong or 14,850 square meters equipped with customer consulting rooms, repair centers and car component shops.

``With the upgraded facilities, we can extend more systematic services from purchase to after-sales service,'' said an official at Jamycar.

The dealer targets monthly sale of 300 units this year and 500 units next year and plans to install branches in and around Seoul.

AutoCube is another enterprise-formed dealer in the market. It has been dealing with 600-1,000 automobiles per month through its five shops in Seoul, Ilsan, Pundang, Taejon and Pusan and supplying an online auction service in cooperation with Renault-Samsung Motors.

It plans to emerge as a secondhand car franchise by opening several more salesrooms nationwide and increase its sales up to 2,500 cars a month.

Present auto dealers are also moving to fend off the challenge by the bigger newcomers.

``In Seoul, most of customers associate used cars with Chananpyong, which means that we have been dominating in the market, but we shall enhance our service and expand the our sales places to compete with those with deep pockets,'' said an official at the Korean Used Car Dealers Association.

Changanpyong, eastern Seoul is where most used cars dealers are concentrated in the capital.

The association suggested the Seoul government to raise the regulated minimum land size of a car dealer from 100 pyong to 200 pyong, as a measure to realize the economy of scale.

A group of small dealers plan to open a large-size sales building Seoul Auto Gallery in Yangjae-dong in southern Seoul early next month.

The six-floor and six basement level building will house 81 dealers and a total of 10,000 pyong exhibition halls.

``The time is over for a bunch of petty shops to deal in most of the secondhand car trade. The market will turn toward large-scale businesses,'' said an official at Seoul Auto Gallery.