Automotive Industry "On the Brink of Ecosystem Collapse"... Government "Will Consider Support Measures" (Comprehensive)

Meeting between the Minister of Industry and Representatives of Domestic Automakers and Parts Manufacturers

Jung Manki, President of the Korea Automobile Manufacturers Association (right), is delivering urgent proposals to Sung Yun-mo, Minister of Trade, Industry and Energy, at an industry meeting held on the afternoon of the 21st at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul, to respond to the novel coronavirus disease (COVID-19). Photo by Kim Hyun-min kimhyun81@

[Asia Economy reporters Kiho Sung and Chaeseok Moon] The domestic automobile industry, which has been hit hard by the novel coronavirus infection (COVID-19), has requested the government to provide new liquidity support and implement acquisition tax reductions. In this regard, the Ministry of Trade, Industry and Energy, the relevant authority, has expressed its intention to consider preparing support measures, drawing attention to future countermeasures.

On the 21st at 2 p.m., Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy held a meeting with representatives of domestic automakers and parts companies at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul.

The meeting was attended by Minister Sung and other ministry officials, Jeong Manki, chairman of the Korea Automobile Manufacturers Association, and representatives from five automakers including Gong Young-woon, president of Hyundai Motor Company, Song Ho-sung, president of Kia Motors, Kaher Kazem, president of Korea GM, Dominic Signora, president of Renault Samsung Motors, and Ye Byeong-tae, president of SsangYong Motor. Also present were Shin Dalseok, chairman of the Korea Automobile Industry Cooperative, and representatives from first and second-tier parts suppliers.

In his opening remarks, Minister Sung said, "I highly appreciate that our automakers’ overseas plants have resumed operations in the order of China, the Czech Republic, Russia, and Turkey, and that domestic plants and parts factories are currently operating normally without additional confirmed cases." He urged, "Like the recent smooth completion of wage negotiations by Korea GM, Renault Samsung, and SsangYong Motor, I ask labor and management to unite in overcoming the crisis and maintaining jobs."

The ministry expects that production and sales across the automobile industry will decline starting this month due to the spread of dealer closures in Europe and North America, which account for 63.1% of our automakers’ sales.

Minister of Trade, Industry and Energy Sung Yun-mo is giving opening remarks at the "Automotive Industry Meeting for COVID-19 Response" held on the afternoon of the 21st at the Korea Automobile Manufacturers Association conference room, meeting with domestic car manufacturers and parts companies. Attendees included representatives from five domestic car manufacturers?Hyundai, Kia, Ssangyong, Renault Samsung, and GM Korea?as well as parts suppliers and the Korea Automobile Industry Cooperative. Photo by Kim Hyun-min kimhyun81@

Earlier, on the 22nd of last month, Minister Sung held a meeting with the automobile parts industry, and this time he held a meeting including all first and second-tier parts suppliers to hear the industry's opinions.

Representatives of automakers and parts companies attending the meeting requested the government to provide ▲new liquidity support and ▲additional domestic demand stimulation policies.

They said liquidity support is necessary due to the burden of fixed costs such as wages, which require constant expenditure. They requested the implementation of acquisition tax reductions in addition to the current individual consumption tax.

They also requested extensions of tax payment deadlines (6 to 9 months) for automobile individual consumption tax, value-added tax, customs duties, etc., and the continued exemption of last year's automobile greenhouse gas standards (110g/km) for this year.

Minister Sung stated, "We will closely monitor the situation of the automobile industry and consider preparing support measures with related ministries if necessary."

He also said that through additional support of 8.4 trillion won in Primary Collateralized Bond Obligations (P-CBO) included in the 'Livelihood and Financial Stability Package' and 'Export Vitality Enhancement Plan,' and 21.2 trillion won in special loan limits for small and medium-sized enterprises and mid-sized companies, the government will support automobile parts companies to withstand the crisis.

Minister of Trade, Industry and Energy Sung Yun-mo is giving opening remarks at the "Automotive Industry Meeting for COVID-19 Response" held on the afternoon of the 21st at the Korea Automobile Manufacturers Association conference room, meeting with domestic car manufacturers and parts companies. Attendees included representatives from five domestic car manufacturers?Hyundai, Kia, Ssangyong, Renault Samsung, and GM Korea?as well as parts suppliers and the Korea Automobile Industry Cooperative. Photo by Hyunmin Kim kimhyun81@

Gong Young-woon, president of Hyundai Motor Company, told reporters immediately after the meeting, "(The government) said it will prepare additional measures going forward," adding, "We are hopeful."

Regarding overseas exports, he said, "Since overseas subsidiaries currently hold a large amount of inventory, even if the situation in the U.S. and Europe improves, exports will likely remain difficult for a considerable period." He emphasized, "We must get through this period without major problems so that the entire automobile industry can seize opportunities again."

Meanwhile, Ye Byeong-tae, president of SsangYong Motor, said about business normalization, "We are preparing specific plans for additional self-help measures," and added, "We are also closely consulting with the Korea Development Bank regarding support requests."

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