South Korea’s car-sharing market is fast expanding with a growing number of young consumers wanting to experiment with a wide range of vehicles rather than own a car.

To cash in on the subtle change in the car market, the nation’s industrial giants are responding to such consumer preferences.

Retail giant Lotte Group and the nation’s third-largest conglomerate SK Group are already involved in businesses that cater to such demand and the nation’s largest automaker Hyundai Motor is also considering joining the race, according to industry insiders.

The size of the local car-sharing market has fast grown over the past three years. The number of users has soared from less than 200,000 users in 2013 to around 3 million users this year. And the number of car-sharing customers is expected to grow even more.

Lotte’s Green Car -- one of the two leading car-sharing players -- saw its sales rise from 3.4 billion won (2.9 million) in 2012 to 30 billion won last year while its rival SOCAR saw its sales grow from 2.5 billion won in 2013 to around 50 billion won in 2015, according to estimates by accounting consultancy Samjong KPMG.

“The local car-sharing market is expected to grow more than 100 percent this year as young, tech-savvy consumers will spend less on buying cars, which incur high maintenance costs, but more on just renting or sharing them,” said Lee Seung-hoon, an analyst at LG Economic Research Institute.

Lotte was able to move first as it acquired the then-largest rental company KT Rental -- a parent company of Green Car -- in June last year. Beating SK Group in the bidding war, the group obtained a 100 percent stake in the company valued at 1.2 trillion won.

The acquisition was made as sources said the group chairman Shin Dong-bin, who viewed the car-sharing business as highly marketable, had offered a much higher price than SK.

With strong support from the retail giant, Green Car has been fast expanding its parking places in partnership with the group’s subsidiaries including Lotte Department and Lotte Mart.

SK Group, which belatedly jumped into the local car-sharing market, also picked up speed to invest in the service on the back of its chairman Chey Tae-won. The group bought a 20 percent stake of SOCAR in November by investing 59 billion won. With strong investment from the conglomerate, SOCAR is now on par with Green Car in terms of the number of users, vehicles and sales.

The local car-sharing market may see tougher competition if the nation’s largest automaker Hyundai Motor joins the race, market watchers said.

Hyundai is reportedly reviewing the business with its hybrid and electric vehicles. This is seen as keeping pace with global automakers such as General Motors, Ford Motor and Volvo, which have already started car-sharing services.

“Amid the growing car-rental business, a possible expansion of autonomous vehicles alongside growing demand for eco-friendly cars -- which are less profitable than gasoline or diesel-powered cars -- automakers find it necessary to seek new income sources,” Seo Seung-woo, a professor from Seoul National University’s department of electrical and computer engineering, told The Korea Herald by phone.

“Thus, automakers including Hyundai will inevitably expand businesses into aftermarket services or car-sharing services,” he added.

By Shin Ji-hye (shinjh@heraldcorp.com)