KG Group aims for global used car platform with K-Car acquisition

KG Group is set to establish a comprehensive mobility value chain, spanning from new car manufacturing to used car distribution and financial services, following its acquisition of K-Car, South Korea's leading direct used car platform. The group intends to merge K-Car with its automotive arm, KGM (formerly SsangYong Motor), to broaden its business scope into certified used cars, maintenance, and leasing.

KG Group Chairman Kwak Jae-sun articulated his vision for K-Car, stating, "K-Car's main objective is not simply to trade used cars in the domestic market. My dream is to establish K-Car as a global platform." The acquisition plan was announced in April, and the deal is expected to be finalized by the end of this month after regulatory approval from the Fair Trade Commission.

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K-Car's main objective is not simply to trade used cars in the domestic market. My dream is to establish K-Car as a global platform.

K-Car operates 48 direct stores nationwide, offering services including vehicle purchasing, online sales, and rental services. KG Group's move aligns with the trend of consolidation in the South Korean used car market, driven by the entry of large conglomerates like Hyundai and Kia into the certified used car sector.

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Through K-Car, we can do business with all cars, not just KGM vehicles, which will be beneficial for commercial viability.

Kwak explained that integrating K-Car would complement KGM's existing automotive business. While KGM currently offers certified used cars, its scale is limited to its own brand. "Through K-Car, we can do business with all cars, not just KGM vehicles, which will be beneficial for commercial viability," he said. He also noted that K-Car's corporate leasing and rental services could boost KGM's new car sales, while KGM's maintenance network could enhance used car quality control.

This strategy signifies KG Group's pursuit of growth beyond new car manufacturing. Kwak highlighted the used car market's potential, stating, "A new car is sold once, but used car transactions happen two or three times. The new car market is 1 million units, but the used car market is 2 to 3 million units." He believes KG Group can create a new market in the used car sector, differentiating itself from Hyundai and Kia's focus on new car production.

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A new car is sold once, but used car transactions happen two or three times. The new car market is 1 million units, but the used car market is 2 to 3 million units.

KG Group also outlined expansion plans for other subsidiaries. KG Steel aims to increase high-value products and implement AI-driven 'intelligent factories.' KGM aims to achieve global annual sales of 200,000 units and 10 trillion won in revenue by 2030 through expanded local assembly (KD) projects and a next-generation eco-friendly vehicle lineup.

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We will pursue a platform strategy of entering the local market and jointly conducting purchasing, sales, and repairs, not just exporting used cars overseas.