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Questions raised over 'Cash Transport Specialist' Korea Financial Security adding car sales to its business scope

[비즈한국] Korea Financial Security is drawing attention for adding car sales to its business objectives. As a company that specializes in transporting assets between financial institutions, its operations are unrelated to the automotive retail business. This is why many find the move into car sales somewhat out of place, given the company's established business areas.

Korea Financial Security was established in 1990 through investment from commercial banks. Its main business is the transport of cash, securities, and important documents for financial institutions. While it is a private entity, it effectively performs somewhat public duties.

According to audit reports, Korea Financial Security's revenue last year was 46.1 billion KRW, with an operating profit of 1.2 billion KRW. As of the end of last year, the company's shareholders include Cheongho Easy Cash at 18.55%, Financial Security Holdings at 18.50%, Woori Bank at 15.00%, Kookmin Bank at 14.96%, Shinhan Bank at 14.91%, IBK024110 at 14.67%, and Citibank Korea at 1.39%.

According to the corporate registry, Korea Financial Security added "wholesale and retail of pharmaceuticals" to its business objectives in March last year. This was followed by the addition of "car sales, sales brokerage, and import sales" in October this year. These are businesses that are difficult to associate with Korea Financial Security's current operations. Although the company’s business objectives include "freight vehicle transportation," this is for cash transit purposes and is unrelated to selling cars directly.

There has been no significant news regarding the pharmaceutical business added last year. One of Korea Financial Security's branches previously posted a job opening for employees to handle pharmaceutical deliveries. However, this was for the purpose of "delivery" rather than direct retail. Last year's revenue of 46.1 billion KRW was entirely generated from services, with no revenue coming from product sales.

Of course, adding a business objective does not mean the company must necessarily pursue it immediately. There are many cases where companies add objectives first and begin operations only after long-term preparation. It is true that the atmosphere at Korea Financial Security has been positive recently. While the company had long suffered from chronic deficits, it succeeded in turning a profit in 2023 with 91.66 million KRW, and in 2024 it recorded an operating profit of 1.2 billion KRW. Although the scale of the profit is not large, achieving profit for two consecutive years is encouraging. In such a situation, it is not strange to pursue new businesses to expand the scale of operations.

Nevertheless, the feasibility of the car sales business remains questionable. To sell cars, one must sign contracts with vehicle manufacturers. Domestic manufacturers like Hyundai Motor005380 already have numerous direct-managed dealerships, so there seems to be no reason for them to sign a contract with Korea Financial Security.

The import car market is considered a potential entry point. The market situation for imported cars is also favorable. According to the Korea Automobile Importers & Distributors Association (KAIDA), the number of imported car registrations in Korea increased from 194,731 units from January to September last year to 225,348 units in the same period this year, an increase of over 15%. Jung Yoon-young, Vice Chairman of KAIDA, explained, "New registrations of imported passenger cars in September increased compared to the previous month due to smooth volume supply for some brands, the effect of new car launches, and active marketing."

However, many import car brands have already established direct operations in Korea, and major conglomerates such as HS Hyosung, Kolon, and KCC are already involved in the import car dealership business, leading to intense competition. In addition, companies of considerable scale, such as Deutsche Motors, Handok Motors, and Dongsung Motors, are also selling imported cars. Even if Korea Financial Security enters the imported car market, the environment makes it difficult to maintain a competitive edge. BizHankook contacted Korea Financial Security to hear their stance on the matter but received no response.