Lotte Rental has announced an ambitious plan to significantly increase its sales and operating profit (OP) by 1.5 times and 2 times, respectively, by 2028 compared to 2023 levels. The company aims to achieve this by enhancing the profitability of its existing operations and venturing into new business areas.
The firm outlined its strategic goals during the CEO IR Day event, setting targets of W2.75 trillion in sales and W305.2 billion in OP for 2023 as benchmarks. To bolster its car rental business, Lotte Rental plans to reduce accident costs and improve customer retention. Additionally, the company intends to expand the usage of cars for new services such as used car rentals and commercial car leases.
Lotte Rental is set to enter the B2C used car market with a directly-operated online platform launching in October, aiming for W2.3 trillion in sales by 2028, capturing a 10% market share. The company also plans to grow its B2C long-term and short-term car rental businesses in Vietnam and launch rental services in destinations popular with Korean travelers, starting with Okinawa, Japan.
In a move to strengthen shareholder returns, Lotte Rental has committed to using over 40% of its net profit for shareholder returns over the next three years. This includes a 30% dividend payout and a 10% allocation for treasury stock buybacks and cancellations. Although the buyback size is modest at W10 billion this year, the plan involves annual buybacks with an expansion expected from 2025, supported by increased profitability.
