A Study on the Export Competitiveness of Used Cars in Korea

Purpose - For the sustainable trade of the global society, trade phenomena related to the trade of used commodities were analyzed. Used cars are older than new cars, so they are of lower quality and have a lower market value. This makes them a challenging area of research, as there is a lack of prior research. Design/Methodology/Approach - From the perspective of environmental conservation and resource conservation, there is a need for research on the export of used cars as a form of resource recycling. The trade phenomenon was analyzed using K-Stat and UN Comtrade Statics data. Findings - Used goods trade does not occur only in developing countries, and it is used frequently in developed countries as well. We find a very strong positive correlation between used car exports and new car exports. According to the Trade Specialization Index, used cars have an absolute export competitiveness advantage, even though new cars have low export competitiveness. This suggests that used cars complement new cars in the export market. Research Implications - The present study was challenging to undertake due to the fact that it was conducted in the field of used goods, which made it difficult to obtain prior studies and public data. However, the used car sector, a significant component of Korean automobile exports, has been validated as an export product that is competitive with developed countries.