Warning lights flash in the used car export market... 'Auction acceptance rate falls below the psychological threshold of 50%'

*This content was translated by AI.

According to analysis data from a major domestic used car auction site on the 22nd, the used car acceptance rate dropped below the psychological threshold of 50%, plummeting to 48% in early April. The used car acceptance rate serves as a barometer for the used car market and is one of the key market indicators for forecasting the used car export market.

The decline in the used car acceptance rate is attributed to a convergence of various external variables. Among external factors, the most significant cause is the sharp drop in used car export volumes compared to the previous month. Export restrictions and tariff hikes in Libya, the largest market, have weakened the price competitiveness of Korean used cars, leading to a sharp decline in local demand. Additionally, a worsening shortage of dedicated car carriers and the blockade of the Strait of Hormuz have disrupted major transportation routes, pushing the market into a period of rapid stagnation.

The problem is that the supply of used cars entering the auction market has effectively exceeded demand, creating a state of so-called "oversupply." In particular, as of March this year, 48,222 used cars entered the auction market, reaching a record high. While March is typically a period when used car demand picks up, the volume exceeded forecasted levels. In past auction markets, demand rose alongside supply, leading to a corresponding increase in the acceptance rate. However, demand itself has plummeted sharply. While the volume of cars listed has increased, buyers, feeling the burden of regulations and logistics costs, have become passive in their purchasing, revealing the limits of the market's absorption capacity.

Nevertheless, the drop in the acceptance rate to 48% is nothing short of a "market shock." The aftermath of the war has struck directly. The impact of the war is expected to persist for the foreseeable future. In particular, export routes to Gulf countries centered on Syria and Jordan remain uncertain. If the blockade continues, logistics costs will rise accordingly, directly leading to a decline in the auction acceptance rate.

According to an industry insider familiar with the used car market, "Given the robust performance of used car exports last year, this year's indicators will inevitably show a downward trend regardless of the specific figures." He further analyzed, "Even if export values or volumes temporarily rise, the acceptance rate remains the most accurate psychological indicator of the market." Citing this as a key metric, he noted, "The volume of vehicles that must be scrapped and deregistered before exporting used cars over the past two years averaged 10,000 units per month, but since November last year, it has fallen below 10,000 units and recently dropped to around 3,000 units," implying that warning lights have been triggered in the export market.

Meanwhile, Park Chan-dae (Yeonseo-gu A), a National Assembly member and candidate for Mayor of Incheon from the Democratic Party of Korea, stated on the morning of the 20th at the used car export complex in Okryeon-dong, Yeonsu-gu, "It is regrettable that the Smart Auto Valley project was cancelled, but we must develop an alternative regardless." He added, "Since there are limitations to the private sector leasing land and promoting the project, it is necessary for the public sector to actively participate."

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*This content was translated by AI.