Government to Invest 367.9 Billion KRW in Future Car R&D This Year (Comprehensive)

Hong Nam-ki Unveils Gift Bundle on Day Meeting Business Leaders
Promises Financial Support for Semiconductors and Future Cars

[Image source=Yonhap News]

[Asia Economy Reporters Choi Dae-yeol and Jang Se-hee] The government announced on the 16th that it will invest 367.9 billion KRW in future car research and development (R&D) this year and will also significantly increase the budget for vehicle semiconductors next year. Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki met with business leaders including Choi Tae-won, chairman of the Korea Chamber of Commerce and Industry, in the afternoon, effectively presenting a bundle of gifts.

At the ‘8th Big 3 Innovation Growth Promotion Meeting’ held at the Seoul Sangam Autonomous Driving Demonstration Zone, Deputy Prime Minister Hong stated, "This year, we will support future car R&D with 367.9 billion KRW, a 37% increase from last year, and will strongly continue the current investment strengthening trend until 2025." This is based on the judgment that growth in the global market is impossible without key technologies such as autonomous driving and eco-friendly vehicles. Hong emphasized, "As the shortage of vehicle semiconductors continues, production disruptions are expanding among global automakers including our companies, raising concerns about prolonged supply instability. A full-scale response from both government and companies is urgently needed to compete in system semiconductors and future car sectors and to secure global market share."

He added, "We will identify items that can be commercialized in the short term (with project announcements between April and May) and prioritize support through the ‘materials, parts, and equipment’ projects, and next year, we plan to significantly increase the related budget. To respond to the increased power consumption of future cars, we will also support new R&D budgets for power semiconductors and others."

In the afternoon, Deputy Prime Minister Hong met with economic organization leaders including Choi Tae-won, chairman of the Korea Chamber of Commerce and Industry, Koo Ja-yeol, chairman of the Korea International Trade Association, Sohn Kyung-shik, chairman of the Korea Employers Federation, Kim Ki-moon, chairman of the Korea Federation of SMEs, and Ban Won-ik, vice chairman of the Korea Association of Small and Medium Business. The business community urged the government to take a more active role, including timely tax support, as the domestic and international economic situation remains poor due to COVID-19, especially for small and medium enterprises pushed to their limits. They also requested that the government reflect corporate voices in the process of implementing policies that burden management, such as the Serious Accident Punishment Act scheduled to take effect in January next year. The government and the National Assembly are currently refining the enforcement decree of the Serious Accident Punishment Act. Companies believe that the act will inevitably restrict business activities and suggest limiting the death criteria to ‘repeated deaths within a certain period’ or ‘occurrence of two or more deaths,’ or mitigating or deleting ‘serious accidents other than deaths (injuries and illnesses).’

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