Automakers are expanding their entry into the used car business. The certified pre-owned (CPO) market, which had been centered on imported brands, is now extending to domestic manufacturers. While the industry explains this as a move to extend vehicle lifecycles and enhance brand trust, the market also interprets it as a strategy to jointly manage new and used car pricing structures.
Precision inspection zone at Hyundai Motor’s Yangsan Certified Used Car Center. / Hyundai Motor
The auto industry’s entry into the used car market has been accelerating in recent years. What initially formed around imported brands is now spreading to domestic automakers. Hyundai Motor and Kia launched their own certified used car businesses in 2023, and KG Mobility signed a contract on March 31 to acquire used car platform company K Car. These moves are seen as attempts to integrate the entire automotive value chain beyond simple vehicle sales.
On the surface, automakers’ expansion into used cars aims to extend vehicle lifecycles and secure profitability. The strategy is to directly distribute reliable used cars to enhance brand credibility.
However, the industry sees a structural objective behind this trend. It is viewed as an attempt to maintain used car prices at a certain level to protect brand value and secure control over pricing between new and used cars.
In reality, used car prices are closely linked to demand for new vehicles. Experts believe that if used car prices remain above a certain level, the residual value of new cars also increases, which in turn strengthens brand competitiveness.
From a consumer perspective, the resale price—i.e., depreciation loss—is a key consideration when purchasing a vehicle, making them more likely to choose brands with higher residual values.
As a result, stable used car prices act as a factor that stimulates new car sales, according to industry analysis. This is because purchasing decisions are more influenced by depreciation loss than by the vehicle’s initial price.
Number of inspection items and warranty periods for certified used cars by manufacturer. / ChatGPT
Within this structure, automakers are using “certified used cars” as a key tool. This involves standardizing used car quality through proprietary inspection criteria and warranty systems. Hyundai Motor sells only accident-free vehicles that have passed 272 inspection items. Mercedes-Benz provides inspections across 198 items along with a one-year or 20,000-kilometer warranty service. This is interpreted as a strategy to institutionally enhance trust in used cars and secure price defense power.
An industry official said, “When used car prices remain stable, it has the effect of stabilizing the overall pricing structure of the brand,” adding, “This directly affects new car pricing strategies as well.”
The expansion of the used car business is also changing revenue structures. If used car prices are maintained above a certain level, automakers can design various service models—such as leasing, rental, and subscription—more stably. As the structure of re-distributing vehicles after retrieval becomes established, the revenue model expands from one-time sales to the entire vehicle lifecycle.
Market scalability is also cited as a key factor. Korea’s used car market sees approximately 2.5 to 2.6 million transactions annually, with an estimated size of around 30 trillion won. According to Kaizyu Data, used car transactions reached 2,267,396 units in 2025, significantly exceeding new car sales of 1,688,007 units. Considering that in advanced markets used car transactions are about twice those of new cars, the domestic market is also expected to expand in the long term to around 3.5 million units annually, or about 50 trillion won.
Consumer response has been relatively positive. Given the strong distrust toward false listings and unfair transactions in the existing used car market, expectations are reflected in a structure where automakers directly guarantee quality and vehicle history. The fact that manufacturers provide direct warranty repairs in case of issues also plays a role. In fact, demand for certified used cars is increasing, even at somewhat higher prices.
However, there are concerns about potential conflicts with existing distributors during the market restructuring process. If the market is reorganized around automakers, it could affect overall pricing formation and transaction structures.
An industry official said, “The used car business is not just an expansion of distribution but a structural change that designs both new car pricing and demand,” adding, “It reflects a shift in the profit structure of the automotive industry itself.”
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