Lotte Rental has signed a strategic business agreement with KB Capital to lead the domestic rental industry.
Through this contract, Lotte Rental and KB Capital have agreed to actively utilize each other’s infrastructure to create synergy and expand their business models. Lotte Rental plans to expand its customer base for both short and long-term rental cars and vehicle maintenance services through joint marketing with KB Capital. KB Capital will operate a dedicated used car page for Lotte Rental on its online platform, “KB Chachacha,” and provide financial products to customers acquiring used cars.
Additionally, new business models leveraging each company’s inherent competitive strengths will be concretized. Lotte Rental will provide maintenance infrastructure and vehicle maintenance services for long-term rental customers of KB Capital and will acquire some of the rental cars whose contracts have expired for use in used car rentals, exports, or auctions. Through this partnership model, Lotte Rental aims to establish a trusted domestic car life service standard where users can rely on management while utilizing cars. KB Capital plans to expand its long-term rental car service within the “KB Chachacha” platform, enhancing the vehicle options available for customers and strengthening platform competitiveness.
Furthermore, plans are underway to specifically discuss business cooperation linked to the six offline certified used car showrooms owned by KB Capital (Incheon, Yongin-2, Gimpo, Daegu, Ulsan) and the configuration of financial products.
A representative from Lotte Rental stated, “This partnership marks the beginning of a new business model that utilizes Lotte Rental’s over 38 years of expertise in the rental industry and a full lineup of automotive living capabilities.” They added, “We will continue to introduce a variety of partnership business models based on Lotte Rental’s strengths to lead the domestic rental industry.”
Meanwhile, Lotte Rental announced its fourth-quarter performance for 2023, reporting sales of 654.9 billion won and an operating profit of 52.5 billion won. For the entire year of 2023, sales reached 2.7521 trillion won, with an operating profit of 304.5 billion won and a net profit of 118 billion won. This represents a 0.5% increase in sales and a 33.6% increase in net profit compared to the previous year, with net profit hitting a record high.
Currently, Lotte Rental is pursuing business optimization aimed at maximizing return on assets (ROA) and transitioning to a non-asset-centered business model to secure future growth drivers. Since the third quarter, Lotte Rental has strategically reduced the sale of used cars to focus on growing the rental core business through its “My Car Save” product. Although there was a temporary decline in sales and operating profit in the third quarter due to reduced used car sales and increased marketing costs from launching a new brand, the second half of 2023 is viewed as a preparatory period for structural improvement, with expectations for a stable performance recovery based on expanded used car rental revenues starting in 2024.
Lotte Rental is Korea’s No. 1 rental car brand, offering a full lineup of automotive services, including Lotte Rent-a-Car, car-sharing service Green Car, used car auction platform Lotte Auto Auction, and a commercial vehicle finance company, Lotte Auto Lease. In November, it launched the “Lotte Rent-a-Car My Car” campaign featuring brand model Lee Hyori, proposing a new car life that makes everyday life easy to enjoy.
Inquiries: Jang Jae-seok daedusj@autodiary.kr