Charancha drives mobility shift with blockchain, AI-powered trust

Charancha, a mobility platform company, was founded to address problems in the used car market with technology. Going over and beyond as a platform for buying and selling used cars, Charancha has set out a vision to create a new mobility ecosystem based on data and trust. After its launch in 2021, the company has shown continuous growth, logging 66.5 billion won ($48 million) in revenue last year, up 84 percent on year.

Kwon Hyeok-min, vice chair of Deutsch Automobile Group, the parent company of Charancha, says Charancha’s goal is to “overcome the used car market’s structural problems — lack of trust and data disconnection — with technology and emerge as a ‘trust-based mobility tech company’ that sets new standards for mobility asset transactions.”

Q. How do you assess the rapid shift in the mobility industry?

I think it’s more accurate to say the phrase of a “paradigm shift in the mobility industry.” With the supply of electric vehicles, the spread of software-defined vehicles, or SDVs, and the rise of mobility-as-a-service, or MaaS, cars have been transforming into service hubs where data and software are combined. As over-the-air updates and connected features become common, cars are no longer fixed hardware products upon assembly, but continuously evolving software platforms.

In fact, automakers and tech companies are expanding businesses into various areas such as finance, insurance, maintenance, subscription and energy sectors by using vehicle data. Customers also want a seamless, integrated experience in one journey instead of services spread out. In the midst of this, the essence of mobility data is not just accumulation. I believe data can create trust and value when a positive cycle of data supply, verification and utilization, as well as service return and reengagement, works.

Q. Which market will be at the core of the mobility paradigm shift?

The used car market will be at the center of new growth opportunities and innovation.

Korea saw 2.42 million used car transactions last year, about 1.5 times more than new registrations of 1.65 units, with a market value of about 30 trillion won. The moment of a used car deal is when all the information of the car’s life cycle, such as mileage, maintenance history, accident records, insurance and financial information and former transactions, is traded. How you can organize that data transparently and believably will determine whether one makes it or misses in the market. Organized data makes the car “a digital asset with a verified history and value” while opacity and information asymmetry lead to fake listings, mileage tampering, unfair pricing and unpredictable risks of breakdown, fueling the anxiety of customers.

Q. How did your take on the mobility industry and the used car market’s growth impact Charancha?

Charancha looks to redefine the future of the used car market through artificial intelligence and blockchain technologies. In essence, we are trying to overcome the lack of trust and data disconnection, which are structural problems of the used car market. To this end, Charancha aims to establish a reliable infrastructure through three key services: Milelog, AI Agent and Charancha Extended Warranty, or EW.

Q. What is Milelog?

Milelog is not just a simple driving log app, but a platform that transforms every driving moment of a driver into data assets. Driving data is recorded on the blockchain to prevent any possibility of tampering and to offer rewards to the driver for such data. In this way, it allows for a drive-to-earn, or D2E, model that allows customers to participate in the process as data producers and stakeholders at the same time.

We launched Milelog in January this year and it has shown a notable outcome. The user retention rate of the app over the past three months was 41.3 percent, with 84.3 percent of them being heavy users, proving the loyalty of the service as drivers continue using the app instead of merely installing it. The accumulated data from Milelog serves as key information that guarantees the trustworthiness of driving history later when the car is dealt in the used car market.

Q. How can you ensure the validity of Milelog’s data?

Our partnership with global blockchain main net Aptos upgrades Milelog’s competitiveness. By securing the integrity of data, the driving information recorded on Milelog is not a mere driving log, but objective evidence that can be used for evaluating the vehicle and defending depreciation. Further, it will position itself as a core pillar in building the Digital Vehicle Passport in the future.

Q. What kind of role will AI Agent play?

Charancha’s AI Agent is a car-dedicated intelligent consultant that goes beyond a chatbot. AI Agent learns large data such as maintenance, finance and warranty and answers the customer’s question in real time. It can help support the decision-making process covering the entire life cycle of a vehicle, including a less-experienced driver’s first purchase or a previous driver’s financial planning and maintenance history.

AI Agent has noticeable technological strengths. Using the technologies of multiagent architecture and retrieval-augmented generation, or RAG, it can take the advantages of AI models such as ChatGPT and Gemini and combine them with Deutsch Automobile Group’s verified database to maximize the reliability of answers. Therefore, it offers customized answers that can be trusted for customers looking to buy a new car or a used one.

Q. Customer consulting services using AI in other industries have not really received positive feedback. Will Charancha’s AI Agent prove otherwise?

We proved that AI Agent can work. When we conducted a proof of concept within the company for two weeks last month, we received 679 inquiries with a revisiting rate of 44 percent. Although it was just a demo test, the usage rate was quite high, while showing that it could serve as a decision-making tool instead of just an information search tool. Charancha targets to develop AI Agent into a hub for customer experience that can connect car search, finance, warranty and maintenance in one journey.

Q. How does Chrancha EW work?

Charancha EW is a service that alleviates anxiety after purchasing a used car, such as from financial burdens of unforeseen repairs and warranty gaps. It guarantees up to 5 million won of repair costs for up to six months or 10,000 kilometers after purchase.

We offer CARE6, which is a basic dealer’s warranty, and CARE+, an extended warranty. In particular, Charancha’s EW service is available at 380 Speedmate service centers across the country, reducing the customer’s fear of having a warranty and not being able to use the service. Charancha EW works on a standardized procedure of reception, assessment, repair and reimbursement with a designated network under the contract’s warranty areas and exceptions for fairness. Customers will be able to experience a warranty service that can be trusted based on its step-by-step instructions and transparent standards.

The biggest significance of Charancha EW is that it addresses the biggest postpurchase anxieties of customers. Customers can reduce the anxiety of “What if it breaks down?” in the decision-making steps of buying a car, leading to an increase in the conversion rate. Starting with Charancha’s directly managed inventory of used cars within its platform, we plan to launch the service soon.

Q. You mentioned the Digital Vehicle Passport when explaining Milelog. What exactly is DVP?

The Digital Vehicle Passport is a big picture that will be made together by Milelog, AI Agent and Charancha EW. The data from a car’s entire life cycle — purchase, driving, maintenance, warranty and resale — will be recorded on the blockchain in an impossible-to-be-tampered-with way to systematically prevent underlying problems of the used car market: fake listings, tampering and mistrust.

Through this, cars will go beyond simple transportation and be transformed into verifiable digital assets. It will then greatly increase the customer’s trust while reducing the risks of backend industries such as finance, insurance and exports to make the overall industry’s ecosystem positive.

Q. Can Charancha’s vision be distinguished through technology only?

Technology alone will not be able to explain Charancha’s uniqueness because it has to be backed up with mother company Deutsch Automobile Group’s accumulated offline infrastructure, data assets and brand reliability.

Deutsch Automobile Group laid out the premium used car market’s standard by introducing BMW certified used car BMW Premium Selection in 2005 and opened the world’s biggest auto complex, Deutsch Autoworld, in 2020 to establish and lead in infrastructure. Further, we acquired Sajik Autoland in Busan in 2023 to expand our used car network in the Yeongnam region (of Busan, Daegu, Ulsan and North and South Gyeongsang provinces) and now we operate nine global brands' dealerships, including BMW and Mini, Porsche, Audi, Lamborghini, Aston Martin, McLaren and BYD, securing an extended sales portfolio of selling premium import vehicles and eco-friendly models, as well as brand-certified used cars.

We also have a complete value chain ranging from new cars to used cars, after-sales, finance and recycling through Deutsch Financial and DT Innovation. Such a structure creates an entry barrier for online-only competitors as it is connected to physical footholds such as Deutsch Autoworld and 75 dealership networks nationwide, our exclusive asset of repair and sales data at official service centers and AI and blockchain technologies.

Integrating the group’s strong offline infrastructure with digital, Charancha looks to break off from the traditional auto mobility ecosystem and play the role of a digital engine that changes based on decentralized technology and trust of data.

Q. Charancha’s vision appears to be more than just a revolution of the used car platform.

That is correct.

What Charancha offers goes beyond a revolution of the used car platform. The domestic used car market has persistent slow growth and customer anxiety due to structural problems of lack of trust and data disconnection. However, amid the mobility paradigm shift, Charancha is presenting a new breakthrough by setting up a positive cycle centered around data and trust.

Charancha’s existing used car platform, Milelog, AI Agent and Charancha EW are not independent services, but they are connected to create a strong bond and this creates a powerful link that leads to an organic synergy of trust, experience and reward.

Q. What is the future Charancha envisions?

Going forward, Charancha plans to implement a phased strategy consisting of the short-term accumulation of reliable data and the settlement of services, the midterm realization of the Digital Vehicle Passport’s commercialization and the long-term establishment of a global mobility asset trading platform. Through this, Charancha envisions taking a leap to become a “trust-based mobility tech firm” that presents a new standard for mobility asset transactions.