Korea’s used car exports are expected to break the record this year, following last year. The fact that Korean used cars are selling well is analyzed as a trickle-down effect from increased exports of new cars. As new cars sold well, awareness of used cars also increased, parts supply became smoother, and cost-effectiveness was higher than that of Chinese cars.
According to the Korea International Trade Association on the 10th, the export amount of Korean used cars (based on HS code) last year was $4,743,324,000 (about 6.4 trillion won), the highest since 2014. Cumulative exports from January to August this year also amounted to $3.272993 billion (approximately 4.4146 trillion won), a 3% increase from the same period last year. If the current trend of monthly average exports of more than 550 billion won continues until the end of the year, exports are expected to surpass last year’s record and record more than 6.6 trillion won.
Korean used cars are especially popular in emerging countries. Among them, Middle Eastern countries such as Saudi Arabia, Jordan, and Yemen, and countries belonging to the Commonwealth of Independent States (CIS), a union of former Soviet states, such as Uzbekistan and Kyrgyzstan, are considered major export destinations. There is an increasing number of buyers from this region opening their own export companies in Korea and purchasing vehicles at domestic used car auction houses.
On the morning of the 7th, Lotte Auto Auction, the used car auction house of Lotte Rental in Anseong, Gyeonggi Province. At this place, which handles about 16% of the country’s annual used car auction volume (as of 2023), overseas buyers ahead of the auction this afternoon were checking the condition of the used cars they had selected in advance by going around the exhibition hall where the auction vehicles were parked. Lotte Auto Auction conducts auctions every Monday afternoon after registering auction items, vehicle performance inspection, and car washing by the Friday of the previous week.
Mr. Barakat (55), whom I met at the auction house, distributes used cars throughout the Middle East via his home country of Jordan, where there are no import or export tariffs. He, who has been doing this job for 20 years, said, “I realize that the status of Korean automobiles has increased and the used car distribution system has become advanced.” He added, “High-performance cars are sold to wealthy countries in the Middle East such as Saudi Arabia, and ‘cost-effective’ vehicles are sold to African countries. “It is being sold separately.”
Usually, 500 member companies participate in the auction every week, but since the pandemic, as the number of companies participating in auctions online, such as through mobile devices, has increased, the number of people attending the auction has decreased to less than 100. Among these, export company employees like Mr. Barakat mainly visit the auction house.
As of the end of August, the proportion of companies registered as ‘exporters’ at Lotte Auto Auction was 29.6%, an increase of 15 percentage points from 14.6% in 2020. Mr. Batyr (31), a Kyrgyz national who exports used cars to the CIS, said, “I come to the auction house with three or four colleagues. “They all belong to Middle Eastern countries, and there are many of them of Korean and CIS nationality,” he said. Domestic auction houses are emerging as popular destinations for overseas used car distribution.
Hyuk-min Kwon, CEO of KJ Trading, who is in charge of used car exports, said, “If price competitiveness was the only consideration, I would choose Chinese used cars. However, in terms of quality, the competitiveness of Korean used cars is surpassing that of China.”
Park Young-hwa, president of the Korea Used Car Export Association, said, “As overseas sales of Korean cars increase, the smooth supply and demand of parts for repairs is also acting as a positive factor.” He added, “Options (convenience items) that are installed as standard (in Korean used cars) ) is also good, and exports are showing good performance along with new cars.”
Anseong = Reporter Kim Jae-hyung [email protected]
Reporter Jaehee Han [email protected]
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