Kim Jung-hoon, a 32-year-old office worker, reserved a SM5 vehicle parked near his home in Seoul for 30 minutes last weekend via a car sharing service -- a form of short-term vehicle rental in which users pay by the minute and distance traveled.

All he had to do was search for a desired vehicle near his house, select a rental time period, which can be extended every 10 minutes, and digitally access the car via a smartphone app run by SoCar, a leading car sharing service operator.

“It’s such an easy, convenient service for people like myself who cannot afford a car. I find it particularly useful for going on dates, grocery shopping or an occasional day trip,” Kim said.

Kim is among some 3 million South Korean users of local car sharing services, a market segment that has rapidly grown in value from some 4 billion won ($3.4 million) in 2012 to an estimated 90 billion won as of 2015, according to compiled industry figures.


Led by market leaders SoCar and Green Car, Korea’s fast-growing car sharing business has recently attracted sizeable investments and interest from both SK and Lotte, two of the nation’s leading conglomerates.

Last month, SK Group invested around 50.9 billion won to acquire a 20 percent stake in SoCar, currently the country’s top car sharing service provider in terms of the number of cars in service and users.

“SK made the investment decision given the high growth potential of the car sharing sector and market leader SoCar as well as the foreseen expansion of ‘sharing economy’ businesses,” a SK Holdings spokesperson told The Korea Herald.

SoCar has been growing quickly in size and revenue each year. The number of users soared over three years from 3,000 in 2012 to an expected 1.5 million users by the end of 2015, according to the firm.

The leading car sharing service provider expects to post an annual revenue of 50 billion won this year, up by 70.6 percent from 14.7 billion won in 2014.

SK and SoCar said they are mulling cooperative measures to boost SoCar’s business by taking advantage of SK’s key infrastructural assets, including its nationwide gas stations, repair centers and advanced membership systems.

At the same time, Lotte Rental, Lotte Group’s car rental service unit, is out to strengthen its car sharing business after investing 10 billion won last month into purchasing the remaining 47.7 percent stake in its affiliate Green Car, now a wholly owned Lotte company.

“Green Car had a slight fallback, losing its No. 1 title while it was being acquired by Lotte Group. We are now working swiftly to catch up with our rivals with improved services and promotions,” said a Lotte Rental spokesperson.

The company expects to secure 1.1 million users by the end of 2015 with revenues of between 30 to 35 billion won, which are both slightly behind its rival SoCar.

Yet, Green Car claims that it currently operates the most car rental locations, 1,714 compared to the 1,506 currently operated by its rival SoCar, according to physical counts on the apps as of Dec. 14.

In a bid to reclaim its title as the No. 1 domestic car sharing service provider, Lotte has been stepping up its marketing efforts to promote Green Car by utilizing its advanced retail infrastructure.

The Green Car operator has established “green zone” rental locations at its urban Lotte Hi-mart and Lotte Mart branches and is holding a range of promotional events in conjunction with key Lotte affiliates in the duty-free, recreation, cinema and beverages segments, among others.

Boosted by the financial backing and support of Korea’s big businesses, the two leading car sharing operators are set for a fierce battle for the top post in the market next year.

On the back of its fresh capital inflow, SoCar is looking to drive up the number of its serviced vehicles to 6,000 and post revenues of 100 billion won by the end of 2016.

With renewed backing from Lotte, Green Car expects to drive up the number of serviced vehicles to about 4,500 in the first half of 2016. It expects a twofold hike in profits next year, amid the market’s foreseen explosive growth, said the Lotte Rental spokesperson.

Other local operators including Korail’s Youcar and Citycar -- whose fleet is made entirely of electric vehicles -- are also geared to step up their game to increase their presence in the country’s burgeoning shared mobility services sector.

By 2020, the global car sharing market is expected to reach a valuation of 10 trillion won, with some 26 million users and 500,000 car sharing vehicles running in the world, according to recent analysis by Frost & Sullivan.

By Sohn Ji-young (jys@heraldcorp.com)