During the COVID-19 Crisis on Automobile Day... Jeong Manki Says "Car Industry Does Not Feel Government Measures, The Problem Is 'On-Site Implementation'"

On the 12th, the 17th Automobile Day Ceremony Held at the Korea Automobile Manufacturers Association in Seocho-gu

Jeong Manki, Chairman of the Korea Automobile Manufacturers Association, is delivering a commemorative speech at the "17th Automobile Day Event" held on the 12th at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Ji-hee] "In the aftermath of the novel coronavirus disease (COVID-19) crisis, with export cliffs and sales declines continuing, the government has introduced various measures including the acquisition of P-CBOs (Project Collateralized Bond Obligations). However, the problem lies in on-site implementation."

On the 12th, at the '17th Automobile Day' commemorative ceremony held in the main conference room of the Korea Automobile Manufacturers Association in Seocho-gu, Seoul, Chung Manki, Chairman of the Korea Automobile Manufacturers Association, said, "The industry is facing a crisis, such as the decline in credit ratings of parts suppliers after COVID-19," adding, "However, due to delays in screening and other issues, most companies on the ground do not feel the government's measures in a timely manner."

Chairman Chung pointed out the need for timely liquidity supply and encouragement of on-site implementation. He explained, "Securing liquidity is urgent, but it is especially necessary to lower the threshold for P-CBOs for companies that cannot get loans due to low credit ratings," adding, "Unlike general bank loans which usually have a one-year maturity, P-CBOs have a three-year maturity, so even if credit ratings fall due to COVID-19, companies can endure for a short period and normalize after 2-3 years, which can prevent financial sector insolvency."

Chairman Chung also pointed out the overseas demand cliff and resulting export cliff currently faced by the automobile industry. He said, "Overseas sales of finished car manufacturers in April dropped by more than 60%. For parts suppliers, 160 companies operate 400 factories overseas, and the operating rate of these overseas local corporations fell to 60-70% in March and April," adding, "Delays in payment for goods by local corporations directly lead to delays in payments to small and medium parts suppliers delivering to domestic headquarters, spreading the problem throughout the automobile industry's supply chain."

On the 12th, at the '17th Automobile Day Event' held at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul, attendees including Jeong Seung-il, Vice Minister of the Ministry of Trade, Industry and Energy, and Jeong Manki, President of the Korea Automobile Manufacturers Association, are taking a commemorative photo. Photo by Moon Honam munonam@

He also urged the government to make active efforts to normalize overseas supply chains. Similar to the early COVID-19 situation when the wiring harness factories in China stopped operations and active negotiations were held with the Chinese government, negotiations with governments of countries such as Turkey and India are necessary to resume operations of Korean factories there.

Chairman Chung emphasized, "If we actively promote expansion of M&A of advanced parts companies, utilize the premium Korea brand enhanced by scientific COVID-19 responses, and incorporate our strengths in IT technology, we can upgrade not only internal combustion engine vehicles but also future automobile sectors such as electric vehicles and autonomous vehicles."

Meanwhile, about 40 people including Jeong Seung-il, Vice Minister of the Ministry of Trade, Industry and Energy, award recipients, and automobile industry officials attended the 17th Automobile Day commemorative ceremony. At the award ceremony for meritorious persons, a total of 11 people were recognized for their contributions to the development of the automobile industry and received government awards, including Yang Jin-mo, Vice President of Hyundai Motor Company (Silver Tower Industrial Medal), and Lee Hee-bang, CEO of Innotech (Bronze Tower Industrial Medal).

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