1. Reasons for Amendment

Consumer dissatisfaction is growing in regards to false advertising and vehicle quality issues, but the high percentage of small businesses among motor vehicle dealers and the very low standard of industry development compared to overseas examples make it necessary to strengthen consumer protection activities by improving the distribution process. Consequently, the Motor Vehicle Management Act has been amended to prescribe grounds to establish cooperatives to handle matters necessary for the operation of motor vehicle transaction businesses such as various guarantees, loans, and liability for damages associated with the sale of a motor vehicle.

Accordingly, this Amendment prescribes requirements and procedures to authorize the establishment of a cooperative, matters to be specified in the articles of association and matters necessary for supervision, etc. (Articles 13-12 through 13-16), matters necessary for the composition, functioning, and operation of the steering committee of a cooperative (Articles 13-17 through 13-19), types of guarantees (Article 13-20), matters to be included in guarantee regulations and mutual aid regulations (Article 13-21), and other matters delegated by the Act to be prescribed in the Decree for the establishment and operation of motor vehicle sales cooperatives.

2. Major Provisions

A. Requirements and procedures to authorize the establishment of a cooperative, matters to be specified in the articles of association, and matters necessary for supervision, etc. (Articles 13-12 through 13-16 newly inserted)

B.  Matters necessary for the composition, functioning, and operation of the steering committee of a cooperative (Articles 13-17 through 13-19 newly inserted)

C. Types of guarantees (Article 13-20 newly inserted)

D. Matters to be included in guarantee regulations and mutual aid regulations (Article 13-21 newly inserted)