Auto service industry goes mobile with host of new apps

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Auto service industry goes mobile with host of new apps

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Hong Eun-jeong, 32, dented her car’s bumper while trying to back into a parking spot near her apartment last month. But when she went to the closest auto shop, the employee told her it would take two days because they didn’t have the parts in storage. She needed the car immediately, and remembering that she had been overcharged on repairs before, she downloaded the app Cardoc on the recommendation of a friend.

Just 10 minutes after she uploaded a photo of her damaged bumper, four auto shops offered her estimates on the repair. She looked at the prices and reviews of the shops as well as their locations before making her final decision.

In the end, she was able to fix her car for less than half of the 800,000 won ($700) her local shop quoted her - and got it done in less than half a day.

The automotive service industry - from repairs to other related services including maintenance, parking, car washes, trades and even designated driving - has gone mobile, with smartphone apps attracting customers with cheaper and more convenient services.

One of the popular car-related apps is Macarong, which helps you keep track of your car’s repair history. After analyzing the maintenance and repair costs reported by other owners of the same vehicle, it provides a customized report with recommendations and estimates.

Park Here is another popular app that allows users to make reservations at nearby parking lots and pay using a smartphone.

Apps making the sale of a second-hand car easier have also become more popular recently.

Bye Car connects some 2,300 second-hand car dealers across the country with those wanting to sell their car. All the seller has to do is upload four pictures of the vehicle, including the interior and exterior, and add basic information like the model, year of manufacturing and mileage.

The auto industry estimates that the market for car-related apps has already exceeded 100 trillion won and, unlike other sectors, has yet to be dominated by conglomerates.

“Areas like second-hand car and parts shopping malls are still in the early stages in Korea,” said Park Jung-ho, CEO of Insun Motors, which operates the repair app PartsMoa. “Because of this, many start-ups using ICT are jumping into the market.”

Eyeing the potential for massive growth, venture capital firms are increasing their investment in start-ups creating car-focused apps.

AirFactory, a car-sharing app, recently succeeded in attracting 1 billion won in investment, including 450 million won from Danal, a company that specializes in mobile payment services, earlier this month. Macarong was able to receive an investment totaling 400 million won from BonAngels Venture Partners in January. Cardoc last year became an affiliate of K Venture Group, the investment arm of IT conglomerate Kakao.

The purpose of these start-ups isn’t to make a quick profit, but rather, to collectively create an all-mobile platform for car services that can serve the 25 million drivers in Korea and their 21 million vehicles.

One example of this cooperation is Auto Avenue, a joint brand created by five different car-related apps that includes car washes, designated driving, and the sale and purchase of second-hand cars.

Major conglomerates like Samsung have begun to get involved. During the Mobile World Congress in February, Samsung Electronics unveiled its Samsung Connect Auto service, which analyzes a driver’s driving habits, including their average fuel usage and maintenance record. Some in the industry believe that once the service expands, it could be used to influence how much a car owner pays in insurance.

However, others argue that such services don’t have a clear way to generate revenue.

“The costs associated with trying to create a service that is different from other similar services is high, and therefore, it’s not easy to generate profits,” said Lee Joon-noh, the CEO of Cardoc.

Because of the difficulties associated with making profits, some apps are increasingly focused on attracting a wealthier clientele by dealing solely in luxury second-hand cars, or adding perks like home delivery and car wash services.


BY CHO DEUK-JIN [lee.hojeong@joongang.co.kr]

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