Lotte Rental continued its growth in the second quarter, driven by strong domestic rental car business. Despite a slowdown in the used car sales market, the expansion of high-profit long-term and short-term rentals boosted operating profit.
The company announced on August 5 that its consolidated operating profit for the second quarter reached 84.6 billion won, a 9.6% increase compared to the same period last year. Revenue rose by 2.3% to 765.8 billion won.
This performance is attributed to the growth of core rental businesses, including long-term and short-term rentals, an increase in the proportion of high-profit products, and cost efficiency improvements.
Long-term auto rentals generated 421.5 billion won in revenue and 45.3 billion won in operating profit, marking increases of 5.1% and 25.6%, respectively. The total number of vehicles put into service during the quarter, including new and used cars, rose by 11.6% to 23,607 units.
Short-term auto rentals saw revenue of 52.5 billion won and operating profit of 9.9 billion won, reflecting increases of 15.6% and 76.2%, the highest profit growth rate among all business segments.
Foreign customers accounted for 37% of daily short-term rental revenue, up 7 percentage points from a year ago. Revenue per foreign customer was approximately 1.8 times that of domestic customers, contributing to improved profitability.
The retail platform for used cars, T car, reported second-quarter revenue of 30.9 billion won, a significant increase of 108.8% year-on-year. Lotte Rental plans to open its fourth offline location in Busan this month, following openings in Gangseo, Seoul, and Bucheon and Yongin in Gyeonggi Province, to expand sales.
However, the used car sales business faced challenges due to international circumstances and rising interest rates, with revenue declining by 2.9% to 217.1 billion won and operating profit down 21.1% to 26.4 billion won.
Lotte Rental stated, "Instead of selling vehicles during a period of low market prices, we are transitioning quality vehicles into long-term and monthly short-term rental assets to enhance lifecycle profitability."
The company is also expanding its overseas operations. Last month, Lotte Rental established a subsidiary in Japan and partnered with Japanese rental car company Orix Auto to launch short-term rental services for Korean tourists in Okinawa. Plans are in place to expand service areas to Sapporo and Fukuoka in the future.
Choi Jin-hwan, CEO of Lotte Rental, emphasized, "With steady growth in core businesses like long-term and short-term rentals, we are continuously improving profitability centered on our rental operations. We will solidify our leading position in the domestic market based on differentiated vehicle operation capabilities and customer service competitiveness."
Meanwhile, the number of registered rental cars in South Korea has surpassed 1.2 million. According to the Korea Rental Car Business Association, the number of registered rental cars in the second quarter of this year was recorded at 1,211,645, an increase of 42,510 units or 3.6% from the previous quarter's 1,169,135.
* This article has been translated by AI.
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