Hyundai Glovis Co., a logistics unit under South Korea’s Hyundai Motor Group, accelerates its global outreach by venturing into used car dealership in China and sea delivery of vehicles across Southeast Asia with Chinese counterpart Changjiu Group.
Kim Jung-hoon, chief executive of Hyundai Glovis, and Bo Shijiu, chairman of Changjiu Group signed the contract in Seoul on Thursday on to establish two separate JVs that focus on used car retail business and automotive sea logistics in China.
Changjiu Group, based in Beijing since 1997, distributes new and used cars and auto financing, with revenue reaching 7 trillion won ($5.9 billion) last year.
Under the contract, the two will work together to enter the burgeoning used car logistics business in China, using Changjiu’s 75 dealerships across the world’s largest auto market. China’s top automotive logistics service provider Changjiu Group distributes vehicles of 13 finished car brands through its dealers.
The Korean logistics company bets big on the growth potential in the used segment in the world’s largest auto market.
“Used car sales usually double the sales of new vehicles in most advanced markets. But used cars are still sold less than half of new ones in China, suggesting that much of growth potential,” said a Hyundai Glovis official.
Used car sales in China reached 13.82 million units, or 133 trillion won, last year, according to the China Automobile Dealers Association.
For the finished car business using the sea logistics network, the two companies will focus on the Southeast Asian market. They will launch a new sea route of China-Korea-Hong Kong-the Philippines for auto shipping next year and then expand its reach to Thailand and Indonesia.
Hyundai Glovis operates 60 pure car/truck carriers now, with the second largest share in the finished car export market for China.
By Lee Jong-hyuk and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]