New 500 Billion Won 'Win-Win Special Guarantee' Established for Auto Parts Industry

5th Emergency Economic Central Countermeasures Headquarters Meeting

Announcement of Support Measures for Major Affected Industries Such as Auto Parts, Medium-sized Shipbuilding, and Sports Industries

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is presiding over the 5th Emergency Economic Central Countermeasures Headquarters meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 28th. Photo by Kim Hyun-min kimhyun81@

[Sejong Asia Economy Reporters Kwangho Lee and Sangdon Joo] The government will establish and supply a 500 billion KRW-scale 'Win-Win Special Guarantee' to support the auto parts industry struggling due to the COVID-19 pandemic. Additionally, a special discount event called 'Korea Together Sale' will be held for two weeks starting from the end of June to stimulate consumption in the first half of the year. Plans to expand overseas orders and activate corporate U-turns will be prepared by July.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance (pictured), held the 5th Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting at the Government Seoul Office on the 28th, where he discussed and finalized additional support measures for major COVID-19 affected industries and plans to promote the Korea Together Sale.

To support the auto parts industry facing difficulties due to a decline in finished car production, the government, finished car manufacturers, and local governments will jointly establish and supply a 500 billion KRW-scale Win-Win Special Guarantee. For this, finished car manufacturers and the government will each contribute 20 billion KRW, and local governments will jointly contribute about 5 billion KRW. Deputy Prime Minister Hong said, "We will support liquidity for small and medium-sized parts companies that have excellent technology or supply contract records with finished car manufacturers but have low credit ratings or have exhausted loan and guarantee limits, thereby protecting the automotive industry ecosystem."

Furthermore, for this year’s customs and value-added taxes related to imported parts, payment deadlines will be extended and installment payments supported until the end of the year at the latest. For automotive industry companies (including parts), customs inspections will be deferred for one year until June next year without separate application to ease tax burdens.

To support automobile demand, the purchase of work vehicles by the public sector will be advanced to over 90% (about 9,500 units) by the third quarter, and the support scale for electric cargo vehicles, which have high market demand, will be expanded from 5,500 to 11,000 units.

Additional support measures have also been prepared for medium-sized shipbuilding, textile and apparel, exhibition, and sports industries. Deputy Prime Minister Hong emphasized, "To alleviate difficulties in the medium-sized shipbuilding industry caused by a decline in orders, we will promote early replacement of old government vessels with eco-friendly ships on about 30 essential vessels, and early orders for coast guard patrol vessels within the year." In cases where ship delivery is delayed due to COVID-19, measures will be taken to extend the maturity of production financing until actual ship delivery.

For the textile and apparel industry, which has worsened due to a sharp drop in global demand, the government will execute 90% of the public sector’s budget for purchasing police uniforms, firefighter uniforms, and other clothing in the first half of the year. For the exhibition industry, which has had offline exhibitions canceled, support will be provided for postponed exhibition booth participation fees (600,000 KRW per company). For the sports industry, plans include expanding loans by 20 billion KRW, supporting indoor sports facility usage fees, supporting quarantine costs for international competitions, and promoting the creation of a non-face-to-face sports coaching market.

The government also announced plans to hold a large-scale special discount event, Korea Together Sale, for two weeks from June 26 to July 12 to stimulate consumption in the first half of the year.

Deputy Prime Minister Hong said, "The Korea Together Sale is a large-scale special discount event held for the first time in the first half of the year, comparable to the representative sale event 'Korea Sale Festa' scheduled for the second half of the year. This event will provide a venue to revitalize consumption and alleviate difficulties faced by large and small retailers, small and medium enterprises, and small business owners who have been directly hit by the COVID-19 crisis."

Deputy Prime Minister Hong added, "Since there are still some cases on site where companies express frustration and difficulties in receiving liquidity support such as refinancing, extension, and loans, I hope the financial sector will show meticulous consideration so that 'umbrellas are not taken away when it rains.' We will soon prepare a 'Plan to Revitalize Exports' including support for non-face-to-face marketing to recover export capacity and K-quarantine exports."

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