Representatives of South Korea’s major automakers, parts makers and industry officials gathered in Seoul on Wednesday to discuss ways to breathe new life into the sluggish auto industry.
The chief executives of the big five automakers — Hyundai Motor Co., Kia Motors Corp., GM Korea Company Ltd., Renault Samsung Motors Co. and Ssangyong Motor Co. — and their local parts makers and industry associations explored ways to tackle daunting challenges facing the industry.
|Sung Yun-mo, South Korea`s minister of trade, industry (C) and energy, and representatives from the nation`s big five automakers, parts makers and industry associations pose for a photo during a meeting held in Seoul on Nov. 14, 2018, to discuss ways to tackle challenges in the auto industry. (Yonhap)|
South Korea’s auto industry is going through a hard time after GM Korea shut down its underutilized Gunsan plant in May, and Hyundai and Kia have been posting generally disappointing earnings this year.
Small and medium-sized companies that make parts for the carmaker were more vulnerable to falling sales, with more than one-third of such Korean auto parts makers posting losses in the first half of this year, data by the think tank Korea Institute for Industrial Economics and Trade showed.
They are also in the crosshairs as the United States is weighing slapping tariffs on foreign-made autos and auto parts on national security grounds.
The participants called for the government to boost domestic demand, provide financial assistance to cash-strapped parts makers and lower regulations in emerging sectors, such as autonomous and electric vehicles.
The automakers said they will seek ways to maintain over 4 million in domestic car production and raise the number to 4.5 million by 2025.
Hyundai Motor, the nation’s leading automaker, said it will invest 220 billion won ($193.8 million) in the next two years to develop an advanced lineup of its hydrogen-fuel electric car NEXO, with a goal of releasing over 30,000 units in the domestic market in 2022.
GM Korea said it will hold trade shows to help its local contractors to tap into the global market and supply 70 billion won in subsidies for small- and medium-sized contractors.
Renault Samsung said it will operate a research and development fund worth 35 billion won by 2020 and form an alliance with Nissan and Mitsubishi to help its contractors’ overseas bid.
Ssangyong Motor promised to expand use of Korean-made parts and help its contractors’ export bid in India.
The Ministry of Trade, Industry and Energy said it will join industry efforts to overcome challenges and drive innovations in the sector.
“If the auto industry and the government work together, we can come up with measures to deal with the hardship,” Industry Minister Sung Yun-mo said during a meeting with them. “We will gather opinions to prepare support measures, especially for parts manufacturers.”
The ministry said it will unveil a comprehensive support package for the auto industry next month, which includes financial and R&D support as well as deregulatory measures. (Yonhap)