Yang Hyang-ja "Catching Two Rabbits: Fostering the Future Car Industry and Revitalizing the Local Economy"

Representative Bill Introduced for Future Car Industry Act... Expected to Accelerate Industrial Restructuring

[Asia Economy Honam Reporting Headquarters Reporter Yoon Jamin] A path for fostering the future automobile industry and revitalizing the regional economy is opening simultaneously.

Yang Hyang-ja, a member of the National Assembly (Democratic Party of Korea, Gwangju Seo-gu Eul), announced on the 21st that she has taken the lead in proposing the "Special Act on the Promotion and Support of the Future Automobile Industry" (hereinafter referred to as the Future Car Industry Act).

This is the final draft after gathering opinions from the Ministry of Trade, Industry and Energy, academia and research institutes, the automobile industry, and the National Assembly following a public hearing on the bill held in Gwangju last month.

Recently, the structure of the automobile industry is rapidly changing from carbon-centered internal combustion engine vehicles to environmentally friendly, autonomous driving, and connected cars, which are future cars. Starting with Norway in 2025, the United States, the United Kingdom, and France have announced bans on the sale of new internal combustion engine vehicles, and South Korea has also announced plans to convert 100% to zero-emission vehicles by 2050.

However, as the transition to future cars accelerates, the domestic automobile parts industry is facing a crisis.

According to BNK Economic Research Institute, if the industrial structure is reorganized from internal combustion vehicles to future cars, the number of automobile parts is expected to decrease by about 37%.

It is also known that about 58.9% of small and medium-sized automobile companies have not established measures for the transition to future cars.

Proper legal regulations and support grounds for the future car industry are also insufficient.

The Future Car Industry Act proposed by Assemblywoman Yang includes the establishment of a foundation and systematic support grounds to promote the transition to future cars.

Specifically, it includes accelerating the transition to future cars through support for the domestic parts industry, strengthening technological capabilities and creating jobs through training future car specialists, and designating future car industry clusters to foster industrial concentration and revitalize the regional economy.

First, when completely transitioning from internal combustion engine vehicles to future cars, the demand for engine, exhaust, and fuel system parts is expected to decrease by 100%, and power transmission parts such as transmissions by 40%.

The future car industry is a comprehensive industry that integrates automobiles, ICT (Information and Communication Technology), and ITS (Intelligent Transportation Systems). Regional small and medium-sized parts companies face limitations in finances and technology, making independent industrial transition difficult.

Therefore, the bill stipulates financial support, education, consulting, and information provision necessary for industrial transition, establishing a foundation and systematic support grounds to promote the transition to future cars.

Assemblywoman Yang explained, "If the bill passes, it will enable support for various industrial reorganizations while minimizing the burden on the existing parts industry ecosystem," adding, "It will greatly contribute not only to strengthening the growth foundation of domestic parts companies but also to the competitiveness of the domestic automobile industry through industrial transition."

Currently, most of the workforce in South Korea is centered on internal combustion engine vehicles. The industry base is unstable due to a lack of personnel with manufacturing capabilities and core technologies for future cars. As of 2019, Germany, an advanced automobile country, had about 126,400 engineers, while South Korea's automobile industry workforce was about 40,000, showing a difference of more than three times.

To address the difficulties of regional parts companies in securing future car personnel and attracting related companies, the bill also establishes grounds for a "Future Car Industry Cluster" where personnel and technology can be concentrated.

Research institutes, universities, and support facilities are concentrated in a specific area to facilitate cooperation among various sectors and build a sustainable development foundation for the future car industry.

Companies residing within the cluster can receive support such as tax and levy reductions, production process efficiency improvements, employment subsidies, and education and training subsidies.

In addition, ▲ minimizing research costs through the establishment of joint research and development facility infrastructure and increasing technological and production capabilities through cooperation among public research institutions ▲ designating support institutions by four major regions: metropolitan area, central region, southeast region, and southwest region to seek balanced regional development ▲ easing requirements for employment retention subsidies and reemployment packages for the unemployed to solve regional unemployment and create jobs are expected to greatly contribute to the competitiveness of the domestic automobile industry and regional economic revitalization.

Assemblywoman Yang stated, "Since the rise and fall of automobile parts companies in major cities are directly connected to the regional economy, the future car industry is essentially a matter of people's livelihood," adding, "As a livelihood bill for fostering so-called 'K-Mobility,' many lawmakers from both ruling and opposition parties have joined in proposing it."

She emphasized, "This bill will help the smooth landing of the domestic automobile parts industry's future car industry and greatly contribute to balanced regional development through the designation of future car industry clusters."

Meanwhile, the "Future Car Industry Act" led by Assemblywoman Yang was co-sponsored by 22 lawmakers from both ruling and opposition parties, including Kwon Seong-dong, Yoon Han-hong, Hong Seong-guk, Kim Seong-hwan, Kim Young-sik, Moon Jin-seok, Seo Il-jun, Song Ok-joo, Yang Jeong-sook, Lee Byung-hoon, Lee Young, Lee Jeong-moon, Jang Je-won, Han Mu-gyeong, and lawmakers from the Mobility Forum research group of the National Assembly such as Ko Yong-jin, Park Seong-jun, Park Hong-geun, Song Gap-seok, Oh Young-hwan, Yoon Young-duk, Jo Oh-seop, and Hwang Un-ha.

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