December 28, 2015 08:24
The car sharing industry is growing massively, from being scaled at W4 billion in 2012 to W90 billion this year (US$1=W1,171).
It grew by 23 times in just three years, and the number of members registered with car sharing companies multiplied 43 times from 70,000 to 3 million.
Car sharing services allow members to hire a car parked in public places across the country using apps. It is hugely popular among those who need occasional access to a car for a short period.
Members can hire a car for as briefly as half an hour and increase the duration by 10 minutes at a time.
Socar and Green Car are the two major companies in Korea. Market leader Socar started with 100 cars in Jeju in 2012 and now operates 3,300 vehicles. The number of members expanded from 3,000 to 1.5 million over the same period.
Green Car, which pioneered the business here in 2011, has 2,800 cars and 1.1 million members. The two companies both posted sales of W15 billion last year, but sustained an operating loss of W2 billion because they invested more than they earned.
They increased the number of car parks where their cars are stationed by 1,000 this year and cars are parked in over 3,000 locations nationwide. Both companies are confident of racking up more than W40 billion in sales this year.
A compact car costs about W7,000 an hour and a medium-sized or imported car some W15,000. Considering the time and distance, car sharing is cheaper than a taxi.
"About 50 to 60 percent of our members are university students who want to go out on a date, salespeople without a car, housewives who want to go grocery shopping during the day, and salaried workers in their thirties who want to use car only during the weekends for leisure purposes," said a Socar staffer.
Convenient 24-hour access is another strong point over old-fashioned car rental businesses.
Big conglomerates are eager for a slice of the action. SK Group invested W59 billion in Socar last month to gain a 20 percent share in the company. Socar will use the money to increase the fleet to 5,000 and reach W100 billion sales next year.
Lotte Rental, an affiliate of the Lotte Group, took over Green Car in June this year. Green Car's goal for next year is to operate 4,500 vehicles and post W100 billion of sales.
Hong Sung-tae at Hanyang University said, "A more pragmatic idea of happiness is spreading these days, and the car sharing industry reflects that. People don't mind not owning a car so long as they have access to one when they need it."
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