April 24, 2024

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[THE INVESTOR] Hyundai Capital, the financial arm of Hyundai Motor Group, is running a pilot program in the southernmost resort island of Jeju to test its new car-sharing service, called Delivery Car, according to news reports on Oct. 25.

The reports said Hyundai launched the program in September, offering generous cash benefits for users. The entry of the nation’s largest carmaker is a direct threat to existing services run by venture firms that have attracted large funds from companies such as SK and Lotte. 

The market leader Socar has secured more than 70 billion won (US$66 million) investments from SK over the past year, while No. 2 Greencar was acquired by Lotte in 2015.

Car-sharing companies spend big on purchasing new cars as the local law bans them from plying used cars. To reduce the huge initial costs, Hyundai has teamed up with some 100 smaller rental car companies, which means more investments for marketing activities.

Hyundai also offers a brand-new delivery service bringing cars directly to clients’ doorsteps, while other existing services require users to pick up the cars.

Jeju, one of the most favored tourist destinations, is becoming a battlefield for car-sharing companies as the island equipped with abundant infrastructure such as an intensive EV charging network is considered a test-bed for electric mobility and other related new services.

By Lee Ji-yoon (jylee@heraldcorp.com)