As the domestic political world is thrown into chaos due to martial law and impeachment, Chinese capital is reaching out to the domestic automobile market, taking advantage of the chaotic domestic situation and covering all aspects of the economy and industry.

As China's largest electric vehicle company BYD officially announced its entry into the domestic market last month, Hong Kong-based private equity fund Affinity Equity Partners is expected to take over 36.5% of the domestic rental car market with the acquisition of Lotte Rental, the number one company in terms of market share, and SK Rent-a-Car, the number two company.

BYD Korea announced on the 13th that it has completed reviewing the launch of its passenger car brand in the domestic market and is preparing to build a regional network for sales and service and recruit personnel by the first half of 2025.

BYD, which has already entered the domestic commercial vehicle market with electric buses and electric trucks, is expanding into the passenger car market and preparing to target general consumers in the electric vehicle market. At the same time, Affinity is taking over one-third of the domestic rental car market, and the entry of Chinese companies into the domestic automobile market is becoming visible.

Some say that Affinity's expansion into the domestic rental car market could benefit Chinese electric vehicle companies, including BYD, that are entering the domestic market. Although there is still a high level of distrust toward Chinese cars in the B2C market, it is expected that B2B products will be supplied mainly in the rental car and lease markets, and this will lead to a B2C trend.

Yoo Ji-woong, a researcher at Daol Investment & Securities, said, “In the case of Hyundai Motor Group, it acquired a 41.9% stake in European rental car companies Sixt and Sixtrissing through Hyundai Capital ahead of its entry into the mobility market,” and analyzed, “Affinity is approaching a 40% share of the domestic rental car market, so its market dominance in new car purchases, used car sales, and the newly formed online B2C market can increase significantly.”

The supply of rental and leased vehicles centered on rental car companies, and the supply of used cars due to the 2-5 year replacement cycle of rental cars can be seen as niche markets for Chinese electric vehicles. For example, if a Chinese electric vehicle is newly supplied to the rental car market, a large volume of Chinese electric vehicles from rental cars can flood the used car market within 3 years when depreciation is minimized.

This means that new entrants with weak brand awareness and brand value can increase their consumer contact based on the rental car and used car markets. For expensive durable consumer goods such as passenger cars, where brand awareness and reliability have a significant impact on purchase decisions, distrust of Chinese products can have a significant impact on purchase decisions.

Accordingly, as consumer experience and verification through rental cars and used cars are possible, it is expected that it will be an important point of observation to see whether Affinity and BYD, which dominate the domestic rental car market, will move together.