*This content was translated by AI.
On the 6th, Hyundai Motor decided to operate a rental car-specialized balance guarantee financial product to lower the burden of purchasing and operating new cars. Regardless of the number of purchases made in the previous year, it also offers discounts of up to 1 million won per unit. Hyundai Motor's win-win promotion is geared toward new and small car rental companies. The rental car industry hopes that it will serve as a priming water to reduce the monopoly influence of Lotte Rent-a-Car and SK Rent-a-Car, which ranks first and second.
First of all, the domestic rental car market recorded explosive growth of about four times in a decade, exceeding 1.2 million units at the end of 2023 from about 300,000 units registered in 2012. In particular, it maintains a stable annual growth rate of about 10%, and the shift from short-term rental in the past to "ownership to use" has become clear as the proportion of long-term rental cars now reaches 70-80% of the total.
However, the problem is that the monopoly system of Lotte Rent-a-Car and SK Rent-a-Car is gradually strengthening. The rental car industry share of these two companies is about 50%, which can be seen as an oligopoly system, establishing a clear two-way system. If you add 12% of Hyundai Capital, the third-largest company, it is actually a "big business."
The status of the two companies is absolute, as the Fair Trade Commission made a final decision in January this year, fearing a rate hike caused by monopoly, even though the private equity fund Affairty recently attempted to acquire Lotte Rental following SK Rent-a-Car. This is because if it is grouped into the same governance structure, the motivation for price competition disappears.
In addition to efforts to expand its market share, the exclusive structure of the rental car industry is unfolding in all directions, such as expanding the used car B2C platform and sales business, preoccupying the electric vehicle ecosystem, and expanding maintenance care services.
In short, the monopoly has been prevented, and the scope of the business is expanding like octopus feet into the rental car-linked industry. This can result in the concentration of various mobility products attached to the rental car in one place. In other words, the so-called "stick-and-sell" linked products are attached one after another in relation to the parent company and subsidiary, creating an ecosystem between internal companies. For new and small car rental companies, it is almost impossible to competitively respond to this service expansion of oligopoly companies.
"We have strengthened win-win support programs to help small and medium-sized businesses and new companies grow sustainably amid changes in the structure of the rental car market," a Hyundai Motor official said. "Hyundai Motor will continue to support strengthening competitiveness and improving customer service through close cooperation with the rental car industry as a whole."
The new and small rental car industry hopes to reduce interest rates, reduce financial risks, create a stable operating environment, and strengthen competitiveness and self-sustainability on their own.
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*This content was translated by AI.
