South Korean media: Monthly exports of used cars exceed $100 million USD, with hot sales in the Middle East market.

On the 19th of this month, the reporter visited the used car export park near the former Songdo Amusement Park in Yonsu District, Incheon. The 500,000-square-meter muddy land was densely packed with unlicensed used cars. This is where about half (2320 companies) of the national used car export enterprises (4854 companies) display more than 20,000 used cars. Vehicles that have been sold are marked with "Sold Out" in whiteboard pen. Transport trailers capable of loading up to five vehicles at once kick up dust as they busily transport the sold vehicles to the docks.

Driven by the "Korean Used Car" craze, the used car export park in Incheon is bustling with activity. According to statistics from the Korea International Trade Association, last month's domestic used car exports reached $761.4 million USD (approximately 1 trillion KRW), an increase of 94.8% year-on-year, setting a historical monthly record. Kim Moon-seon (Kim Moon-sun), CEO of SUNTRADING with 13 years of experience, said, "Buyers from Central Asian countries, such as Turkey and Kyrgyzstan, purchase used cars for resale in Russia, and recently they have a high demand for nearly new-level vehicles. Accident-free SUVs from model years 2021~2022 can be sold for $30,000~$40,000 USD (42 million~55 million KRW), which greatly helps the sales."

The increase in sales in the Middle Eastern region also contributed to the growth in exports. After the collapse of the Assad regime in Syria last December, international trade controls were lifted, and trade activities became active. Last year, Syria sold 144 used cars, but last month alone, 3,084 units were sold. Sales in neighboring Jordan (4,844 units) and the UAE (6,121 units) also increased by 263% and 127%, respectively, compared to the same period last year.

Some exporters also feel unease due to intensified competition. Some foreign buyers who were originally responsible for freight have set up export companies in South Korea and personally participate in the procurement of used cars. Park (38), a used car exporter with nine years of experience, said, "At used car auction sites in Anseong and Siheung in Gyeonggi-do, many foreigners from the Middle East can be seen purchasing, making the competition very intense," "Companies that lose in the competition may become 'brokers' for foreign-funded enterprises."

As the scale of South Korea's used car exports expands, calls to institutionalize the used car export business are growing. Used car exports do not fall under the category of automobile sales, so there is no need for separate permits or licenses, making it a free industry. Due to this, issues such as the qualifications of practitioners, commission systems, and performance inspection standards lack regulations, leading to constant criticism of declining quality. Democratic Party MP Heo Jung-shik submitted the "Automobile Management Act" amendment last month, including the transition of used car export business to a registration system and the development of a comprehensive used car export park.

However, opinions within the used car export industry are not unified. Larger companies believe that institutionalization and industrial support are needed, while smaller companies worry about failing to meet registration requirements. Park Young-hwa, president of the Korea Used Car Exporters Association, said, "Although there are medium-sized enterprises with annual sales reaching hundreds of billions of won, there are also many small enterprises with annual sales in tens of millions or even less than ten million won," "To enhance industrial competitiveness, infrastructure construction is necessary, but it must be carefully promoted to avoid harming small enterprises."

Shin Hyun-do, director of the Korea Used Car流通Institute, pointed out, "Due to the lack of facilities and quality standards, the industry is easily affected by external accidents such as fires, and the methods of determining quality and price vary, "If institutionalized, individual operators who fail to meet registration standards can achieve economies of scale through joint establishment of legal entities, thereby conducting business more efficiently."

Source: JoongAng Ilbo

Original article: https://www.toutiao.com/article/1832723176111168/

Disclaimer: The article represents only the author's personal views.