The government has ordered Hyundai Motor and its affiliate Kia to tap the brakes on their foray into the used car market by one year to minimize the adverse impact on existing businesses.

According to the Ministry of SMEs and Startups on Thursday, a mediation panel approved the order for the carmakers to start selling used vehicles on May 1, 2023. They are permitted to sell less than five-thousand certified used cars during a trial period between January and April of next year.

The auto-making giant affiliates will face restrictions on the number of used cars they can sell between May 2023 and April 2025.

Hyundai is limited to two-point-nine percent of all used car transactions up to April 30, 2024 and four-point-one percent from then until April 30, 2025. Kia is limited to two-point-one and two-point-nine percent, respectively.

The two companies can only purchase used Hyundai or Kia cars from customers who plan to buy a new vehicle of their brand. If cars less than five years old with under 100-thousand kilometers on the odometer fail to sell as certified used vehicles, they must be auctioned off.

The recommendations will be effective for three years from May 1 of this year to April 30, 2025. Upon violation, company representatives could face up to two years in prison or 150 million won in fines.