Automotive Industry Association Operates 'COVID-19 Corporate Difficulty Support Center'

Continuous Monitoring of Automakers and Parts Suppliers

[Asia Economy Reporter Kim Ji-hee] The Korea Automobile Industry Association announced on the 9th that it will operate the 'COVID-19 Corporate Difficulty Support Center' starting from the 10th to investigate difficulties in the automobile industry caused by the spread of the novel coronavirus infection (COVID-19) and to discuss countermeasures.

The center is composed of four organizations affiliated with the Korea Automobile Industry Association (Korea Automobile Manufacturers Association, Korea Automobile Industry Cooperative, Korea Automotive Technology Institute, and Automotive Parts Industry Promotion Foundation) and their members, with the secretariat established at the Korea Automobile Manufacturers Association. Each organization will continuously monitor trends of finished car manufacturers, first-, second-, and third-tier parts suppliers, and parts and materials-related companies.

Earlier, on the 6th, the Korea Automobile Industry Association confirmed the center's operational plan during the steering committee meeting after checking the industry's factory operation status, quarantine system establishment status, and parts supply situation.

In fact, domestic finished car production last month decreased by 26.4% compared to the same period last year due to supply issues of Chinese-made wiring harness parts. However, since mid-last month, parts supply has expanded, and the domestic factory operation rate has maintained around 80?90% at the beginning of this month.

Some finished car manufacturers have not yet implemented weekday night shifts and weekend overtime to adjust volume. This is because if additional COVID-19 confirmed cases occur at the factories, factory operations could be halted again at any time.

The situation in the parts industry is even more severe. Due to unstable operation of finished car manufacturers and inventory adjustments by some companies, the average operation rate is only about 50?70%. If COVID-19 prolongs, there are concerns about worsening management due to reduced delivery volume and sales.

Especially in Daegu and Gyeongbuk, where automobile parts companies are concentrated, if confirmed cases occur at factories in these regions, a chain reaction of operation stoppages is inevitable. About 37% of first-tier automobile parts suppliers (831 companies) are concentrated in Daegu and Gyeongbuk (117 companies) and Busan and Gyeongnam (188 companies).

The Korea Automobile Industry Association plans to promptly convey specific difficulties received at the center to the government and the National Assembly and seek solutions.

Jung Man-ki, chairman of the Korea Automobile Industry Association, said, “Organic cooperation among the public, government, and companies is essential to alleviate the difficulties of the automobile industry caused by COVID-19,” adding, “We especially hope that the parts industry will actively utilize the COVID-19 Corporate Difficulty Support Center.”

This content was produced with the assistance of AI translation services.