Episode 157
“I was just on my honeymoon…” Maru said with a weary expression. “What is all this?”
We were at a construction site in Gyeonggi Province, where a new used car lot was being built.
I shrugged. “What do you think? It’s a new business venture.”
“…I can see that, but isn’t this a bit too much?”
“Go big or go home. That’s the basic principle of business.”
I looked at the busy construction workers with a satisfied expression. “This lot can hold up to 20,000 cars. We’re building 15 of these simultaneously across the country, although the sizes vary.”
Acquiring land close to major cities for easy access had cost hundreds of billions of won, even with the depressed real estate prices due to the financial crisis. It would have cost trillions of won at the pre-crisis prices.
“Well, I understand that, but why did you call me here?”
“Those used car dealers are ganging up on us.”
Even before we had started our business, the used car dealers had formed the “Korea Used Car Association” and were protesting against us, claiming we were encroaching on their territory.
It was a loose coalition of thousands of small businesses and individual dealers, but their combined size was significant.
And emboldened by their size, they were preparing for a full-scale war against us.
“It’s a natural reaction. They’re defending their livelihood.”
“Those small fry are quite a force when they gather together. The problem is that we’re latecomers. We could end up like those used goods dealers who were forced to focus on the domestic market because we lost our export channels.”
The domestic secondhand market was difficult to monopolize due to the prevalence of private transactions, but exports, which relied on buyers, could be monopolized if you controlled the supply.
The same applied to used cars.
The domestic market for cars over ten years old was limited, so most of them had to be exported. The association could pressure us by refusing to sell us their used cars.
I had used the same tactic to control the buyers and monopolize the market.
“You’re saying we could be forced to focus on the domestic market like those used goods dealers?” Maru chuckled. “That’s not likely.”
I smiled. “Well, my situation is a bit different.”
Those dealers had been forced to focus on the domestic market because they couldn’t afford to accumulate unsold inventory. But I was the chairman of Chunha Group, with vast financial resources.
I could accumulate as much inventory as I wanted.
And that inventory itself could become a weapon.
These massive car lots were being built in anticipation of that.
“Once we’ve accumulated 100,000 used cars, any buyer will be tempted.”
“Anyway, why did you call me here? Just proceed with the plan.”
“I want you to learn about this business.”
“What?”
I beckoned to a nearby employee. “This is our new used car expert, Team Leader Han.”
“Greetings, Chairman! I’m Team Leader Han Chang-soo!”
“He’s a veteran in the used car industry. Learn from him. Director Park is busy with Chunha Trading, so you’ll be in charge of the used car business.”
“…” Maru didn’t say anything, but I could tell what he was thinking from his expression.
He thought I was dumping another one of my ventures on him.
“What about you, hyung?”
I smiled. “I’ll handle the sales. I’m not just going to sit back and wait for the buyers to come to us. I’ll be traveling and securing deals.”
Of course, I didn’t immediately start looking for buyers.
No buyer would be interested in a company with no inventory.
Once the car lots were completed and the employees were hired, I launched an aggressive marketing campaign.
A Chunha Used Cars commercial was playing on TV.
“We treat our customers like guests.”
It was a simple but powerful message.
Customers being treated like guests should be a given, but it wasn’t the norm in the used car industry.
“How’s the acquisition going?” Dark circles were visible under Maru’s eyes. He had been studying the used car market and running around tirelessly.
“Acquisitions are going well. People trust Chunha Group more than those small-time dealers. They’re selling their cars to us. But we don’t have enough inventory to meet the demand.”
The Korea Used Car Association, after we entered the market with our low profit margins, was running ads boasting about its large inventory.
We could offer competitive prices for acquisitions, but we needed inventory to sell.
“That’s just a matter of time…”
There were hundreds of car models from various manufacturers.
And even within the same model, there were different options, conditions, and mileage.
We had to offer a wide selection to meet customer demands, but Chunha Used Cars, a newcomer, had a limited inventory.
“If we could just get our hands on the US military’s used cars…”
We had secured a private contract with the US military, but their withdrawal was gradual, not a one-time event.
We had only acquired about 2,000 vehicles so far, a drop in the bucket compared to our massive car lots.
“There must be a way…”
“Like you said, it’s just a matter of time. We’re doing well with acquisitions, so the lots will eventually be full. There’s no need to be so impatient.”
“But time is money. I want to speed things up.”
If this were a restaurant, I would hire people to pretend to be customers and fill the tables. But I couldn’t do that with cars.
“Where can we buy used cars in bulk?”
“There are no such places.”
“But there must be government agencies or large corporations replacing their fleet vehicles…”
Maru interrupted me firmly. “No, there aren’t any. I checked.”
“…Tsk.”
“With the economic crisis, companies are reducing their fleet vehicles, not replacing them. It’s expensive to buy new cars. Just be patient. It’s a matter of time.”
“But I don’t want to waste time. I want to spend money to solve this.”
“Where can we buy used cars… in bulk?”
Where could we find a large supply of used cars?
A thought suddenly struck me.
“I know where to find them.”
“Where?”
I smirked. “The dealers.”
“You’re not buying?”
Son Jung-pil’s face contorted in anger. “I spent an hour showing you the car and explaining everything, and now you’re saying you’re not buying?”
The man in front of him said nervously, “But the price is higher than I expected, and I’m not completely satisfied with the car…”
“Then how are you going to compensate me for the hour I wasted on you? If another customer had come during that time, I could have made a sale and fed my family! Who’s going to compensate me for my loss?!”
He kicked the tire angrily.
“Damn it, why did you even test drive the car if you weren’t going to buy it?! Don’t you know about depreciation? The mileage has increased, and I wasted gas! My time! My money! How are you going to compensate me?!”
“I-I’m sorry.”
“Is ‘sorry’ enough? Does ‘sorry’ pay my bills?!”
“…”
“I’ll give you a discount. Just buy the car.”
“Well, that’s…”
Seeing his hesitation, Son Jung-pil rolled up his sleeves, revealing his tiger tattoos.
The man, intimidated by his display, started trembling.
“I’m trying to be a nice person, but some customers really test my patience.”
“I’ll… I’ll buy it.”
Son Jung-pil smiled. “Good decision. You won’t regret it. Come, let’s go to the office.”
After forcing the man to buy the used car, Son Jung-pil lit a cigarette.
“Business has been slow lately, damn it.”
He was a used car dealer, one of many in the used car lot.
He had about 20 cars in his inventory, a substantial amount for an individual dealer.
He used to make 20 million won a month, as the profit margin for a single car was higher than most people’s monthly salary. But ever since Chunha Group entered the market and started a price war, his income had plummeted.
He had joined the association, outraged by the large corporation’s encroachment on their territory, but the association was pressuring them to lower their prices, and customers were disappearing.
“Those bastards, they’re so cheap and underhanded. Junkyard owners, what do you expect?”
As he was cursing Chunha Group, he heard a knock on the door.
“A customer? Who is it?”
He hurriedly put out his cigarette and opened the door.
“Wel…”
He froze.
He wasn’t short, but all he could see was the man’s chest.
He looked up and his breath caught in his throat.
The man was over 190cm tall, a towering figure in a black suit and sunglasses.
And there were about ten more men of similar stature behind him.
‘What the hell? Are they gangsters?’
He had tattoos to intimidate his customers, but he was just a small-time hustler, not a gangster.
He had heard that some of the larger used car companies had ties to organized crime, but he wasn’t one of them.
Instinctively sensing that he was outmatched, he said with a subservient smile,
“Welcome! Son Jung-pil Used Cars, your trusted partner! How can I help you?”
The large man said in a deep voice, “May we come in?”
Son Jung-pil, overreacting, slapped his forehead. “Of course! My apologies! Please come in, come in, right this way.”
The man turned around and said, “It’s cramped. Only two of you come in, the rest wait outside.”
The ten men bowed. “Yes, sir.”
‘Vice president? Are they corporate gangsters?’ He couldn’t imagine these men working for an ordinary company. He made them coffee, his mind racing.
“Here’s some coffee.”
“Thank you.”
The large man sat down across from him, took off his sunglasses, took a sip of his coffee, and said,
“How many used cars do you have?”
“As many as you need, sir. I’m connected to all the dealers in this lot. Just tell me what you’re looking for, and I’ll find it for you.”
“I’m asking about your inventory.”
“Um… I have about 20 cars.”
“What models?”
He felt slightly annoyed by the questions but answered politely, his demeanor completely different from how he had treated the previous customer.
“…A total of 20 cars.”
“Good. How much for all of them?”
“All of them, sir?”
“Yes, how much for your entire inventory?”
He was flustered. He had never encountered a customer like this. The man said in a low voice, “I’ll pay you 10% above market value.”
“10%?!”
The profit margin for a single car was already high, so a 10% premium was a significant amount. And he was offering to buy his entire inventory.
Son Jung-pil, who had been intimidated, now smiled brightly. And then the man’s next words made his mind freeze.
“Let me introduce myself again. I’m Kim Maru, vice president of Chunha Trading. I’d like to buy all your used cars. And…”
Maru smiled. “If you could introduce us to other dealers as well, we would be grateful.”