"Advanced Automobile Nations, Turning the COVID Crisis into an Opportunity for Eco-Friendly Vehicle Transition"

Major Countries Provide Emergency Financial Aid and Industry Survival Support
"Urgent Need for Bold Policy Support to Prepare for Future Car Industry"

[Asia Economy Reporter Dongwoo Lee] It has been revealed that advanced automobile industry countries are overcoming the crisis caused by the spread of the novel coronavirus (COVID-19) by simultaneously pursuing business support and transitioning to an eco-friendly automobile system. There are calls for South Korea to also prepare comprehensive support measures for automobile companies and the transition to eco-friendly vehicles.

The Federation of Korean Industries, compiling data from the Korea Automobile Manufacturers Association and Moody's, announced on the 1st that due to the spread of COVID-19, the scale of automobile sales in major global markets in the first quarter of this year decreased by 27.5% compared to the same period last year. By region, China (-45.4%), Europe (-26.3%), and India (-22.4%) saw significant declines. The overall global automobile sales market is expected to decrease by 20.2% compared to the previous year.

Accordingly, major countries have significantly expanded support for automobile companies and eco-friendly vehicles. In fact, French President Macron personally announced an 8 billion euro (10.8 trillion KRW) automobile industry support plan, outlining future automobile investment measures such as support for companies and workers facing management crises and the establishment of an environmentally friendly automobile ecosystem.

They supported Renault, which is in a management crisis, with a bank loan of 5 billion euros (6.7 trillion KRW) and increased the subsidy for purchasing electric vehicles from 6,000 euros (807,000 KRW) to 7,000 euros (942,000 KRW) to facilitate the transition to eco-friendly vehicles. They also prepared a plan to provide 3,000 euros (404,000 KRW) when purchasing internal combustion engine vehicles with higher energy efficiency than existing cars. Additionally, 100,000 electric vehicle charging facilities will be installed nationwide by 2023.

The Spanish government also prepared a 3.75 billion euro (5 trillion KRW) automobile industry support plan. About 2.7 billion euros (3.6 trillion KRW) will be allocated for financial support such as low-interest loans to automobile companies including parts manufacturers, and the remainder will be used for subsidies for purchasing electric vehicles. Germany plans to double the electric vehicle purchase subsidy from 3,000 euros (404,000 KRW) to 6,000 euros (807,000 KRW) and expand electric vehicle charging facilities as part of its transition to an eco-friendly vehicle system.

Proactive business and production facility adjustments and workforce restructuring are also being strengthened. Volkswagen announced plans to reduce its workforce by 4,000 by 2023 while newly hiring 2,000 digital-related personnel. GM ended its car-sharing service 'Maven' and implemented a 20% wage cut for employees.

There are also global workforce reduction plans such as Nissan's consideration of closing factories in Indonesia and Spain, and reductions of 10,000 in the U.S., 6,000 in the U.K., and 4,000 in Spain. Renault, which is receiving a 5 billion euro (6.7 trillion KRW) bailout from the French government, announced plans to reduce its global workforce by 15,000 over the next three years and to close some factories.

Yoo Hwan-ik, head of corporate policy at the Federation of Korean Industries, said, “While South Korea has focused policies mainly on supporting parts companies experiencing liquidity crises, major countries are taking the COVID-19 crisis as an opportunity to transform their industrial systems and are providing bold policy support. We urgently need bold policy support to prepare for the future automobile industry, including active support for companies in crisis, expansion of electric vehicle charging facilities, and the construction of roads and communication infrastructure for autonomous vehicles.”

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