Hyosung, Kolon to continue business; only LS Networks chewing over latest developments


Most of the chaebol involved in import car sales said Tuesday they would not be affected by Doosan Group’s withdrawal from the business.

Doosan’s DFMS decided to give up its dealerships of Honda, Jaguar and Land Rover amid public criticism that business moguls’ progeny were running after easy money through bakeries and foreign car sales.

Doosan’s announcement came just weeks after several chaebol, including Samsung Group’s Shilla Hotel bowed out from their bakery and coffee shop businesses.

LS Networks Co., which runs a Toyota dealership in Seoul’s Yongsan, said it was chewing over the latest developments.

“We can’t ignore the various circumstances of the times, so we are considering many things,” Sohn Ho-young, a public relations official of LS Networks, said.

“But we have not come to any conclusions yet.”

Hyosung Group said it would continue with import car sales as it creates synergy with its other businesses such as the manufacturing of materials used in automobiles.

“As a typical business-to-business company, we jumped into import car sales to expand our premium retail business,” Hyosung spokesman Han Chang-seok said.

“Selling premium cars allows us to grasp the complicated needs of our customers, and this experience of dealing with premium customers helps us in other related businesses such as capital lease and auto-related materials.”

Hyosung sells Mercedes-Benz and Lexus cars through subsidiaries The Class Hyosung and The Premium Hyosung.

According to industry officials, Doosan Group had been reconsidering its import car sales business for a while due to dwindling profitability as the sales of Honda nearly halved compared to in 2008.

“We made the decision (to quit import car sales) in consideration of all the latest situations and follow-up procedures with related firms are underway,” a Doosan official said.

Han said Hyosung was in a different position as it expects to see profits this year.

Kolon Group, which has been in import car sales for 25 years, also said it has no plans to stop or reduce the business. Kolon Glotech has sold BMW cars since 1987.

“Selling import cars is not a lucrative business. We have been through sluggish sales and deficits, but we pioneered a new market with a clear purpose and a long-term vision,” a Kolon’s spokesman said.

Public relations officials for GS Group and Hanjin Group said they were not aware of any details regarding the foreign car businesses run by members of their founding families, as the conglomerates do not hold any stakes in them.

Central Motors, which sells Lexus, is entirely owned by GS Group chairman Huh Chang-soo and his family.

GS Group founder’s great grandson Huh Ja-hong is involved in the development of a supercar with a Canadian motor sports company.

The Hanjin Group founder’s grandson Henry Cho established CXC Motors late last year and has secured the dealership rights for Mitsubishi, Iveco and Cadillac, and now is after Chrysler and Peugeot.

DFMS, 100 percent owned by members of the Doosan Group owner family, began selling Hondas in 2005 and opened a Jaguar and Land Rover dealership last year.

DFMS posted 34.5 billion won in import car sales last year. The company will concentrate on building management from now on, according to Doosan.

Early this month, Doosan said it will shut down its coffee shop business, which it had run through its food service subsidiary named SRS Korea.

SRS Korea is also pushing to sell off its KFC and Burger King chains.

Import cars accounted for more than 10 percent of new car sales for the first time last month.

Sales of Korean-made cars plunged 18.2 percent from a year ago, while sales of import cars gained 8.6 percent.

By Kim So-hyun (sophie@heraldcorp.com)