Socar: Update on the South Korean Car Sharing Service Market

Socar: Update on the South Korean Car Sharing Service Market
I kyung Park
Jun 21, 2024


  • Socar (403550:KS) recorded KRW 83.8 billion (+24.1% YoY) in car sharing revenue for 1Q24.
  • Mobility platforms revenue stood at KRW 6.5 billion (+2.3% YoY), while used car revenue sharply declined to KRW 0.3 billion (-96.9% YoY).
  • Implementation of 'SOCAR 2.0' strategy led to a temporary decrease in used car disposals.
  • Expansion in operating capacity by 319.7% YoY to 6,825 units in Socar Plan.
  • Increasing popularity of car sharing among older generations, with significant growth in usage by individuals in their 40s and 50s.
  • Socar maintains a dominant 82% market share in the domestic car sharing market.

Overview of Socar's Revenue Streams

Socar (403550:KS), a leading car-sharing service in South Korea, reported strong revenue growth across its core segments in 1Q24. The company achieved KRW 83.8 billion in revenue from car sharing, representing a 24.1% year-over-year increase. Revenue from mobility platforms also grew modestly by 2.3% YoY to KRW 6.5 billion. However, the used car sector saw a drastic decline, plummeting to KRW 0.3 billion from its usual quarterly average of KRW 15-20 billion, a significant drop of 96.9% YoY. This decline can be attributed to strategic changes implemented in late 4Q23.

The Impact of SOCAR 2.0 Strategy on Used Car Disposal

In 4Q23, Socar introduced the 'SOCAR 2.0' strategy aimed at enhancing growth and profitability. A notable shift in this strategy was the deferral of used car disposals, extending the vehicle operation period from 36 months to 48 months. This move temporarily decreased revenues from used car sales but is expected to significantly boost the car-sharing segment's revenue share. Monitoring car-sharing expenditure will provide greater insight into the company's quarterly financial health.

The implementation of this strategy has led to a substantial increase in Socar Plan's operating capacity, which expanded by 319.7% YoY to 6,825 units in 1Q24. Consumer transaction data from Aicel Technologies indicate a steady rise in transaction volumes during April and May, suggesting sustained growth in this sector.

The Growing Popularity of Car Sharing Among Older Generations

While car sharing has traditionally been popular among individuals in their 20s and 30s, recent trends indicate a growing adoption among older age groups. Socar, with a membership base of 9.7 million in Korea, has seen a significant shift in its user demographics. In 2019, users in their 40s and 50s comprised 10% and 4% of the total, respectively. By 2023, the proportion of users in their 20s and 30s had declined, while those in their 40s and older increased by 23%.

Furthermore, the usage patterns have shifted notably. Last year, total usage time for users in their 20s and 30s decreased by 5.9% and 7.6%, respectively, compared to 2022. Conversely, usage time for users in their 40s increased by 1.6%, and those in their 50s saw a 5% rise. This trend indicates a broader acceptance of car sharing as a convenient alternative for personal transportation among older adults, particularly for activities like golf and camping.

Understanding Socar's Market Dominance and Future Prospects

Socar commands a dominant position in the South Korean car-sharing market, holding an 82% market share and boasting 94% brand awareness. This market leadership underscores Socar's robust business model and strategic execution. Continuous tracking of industry trends through Aicel Technologies' consumer transaction data is crucial for investors seeking to understand the dynamics of this high-growth market.

Conclusion: Robust Market Position Supported by Strategic Adaptation

Socar's performance in 1Q24 reflects its strategic adaptation and market resilience. The 'SOCAR 2.0' strategy, while impacting used car disposal revenues temporarily, has strengthened its core car-sharing business. The increasing adoption of car sharing among older demographics further enhances Socar's market potential. Investors should monitor these trends to gauge Socar's long-term growth prospects.

All data in this analysis is sourced from Aicel Technologies, providing diverse investment insights and enabling continuous strategic evaluations.

This article is also posted on Linkedin.

Related Articles

up to nav button