Hyundai Rotem Provides 11.2 Billion KRW Guarantee Support to 8 Partner Companies

[Asia Economy Reporter Park Sun-mi] Hyundai Rotem has stepped up to support win-win growth with small and medium-sized parts suppliers.

On the 8th, Hyundai Rotem announced that it received approval from the Korea Credit Guarantee Fund (KODIT) for a guarantee support worth 11.2 billion KRW for eight partner companies participating in the "Distributed Power High-Speed Train Mass Production Joint Project."

This joint project, carried out together with partner companies, aims for the stable mass production of a distributed power high-speed train with a top speed of 320 km/h and a localization rate of 90%. Especially at a time when imports of foreign parts are increasing, this project is expected to protect the domestic railway vehicle parts industry ecosystem and further enhance indigenous technological competitiveness.

The "Joint Project Guarantee" operated by KODIT supports loan guarantees for partner companies pursuing future innovative projects such as eco-friendly mobility businesses, next-generation fuel cell businesses, and the Korean New Deal projects. It alleviates the financial burden of small and medium-sized enterprises that have low credit ratings or weak financial structures and find it difficult to receive guarantee benefits independently.

First, when a large company applies for a joint project guarantee for its partner companies, KODIT evaluates the business feasibility and then issues a guarantee certificate to the partner companies to assist in fund procurement. The funds are used to ensure smooth business liquidity for technology development, raw material procurement, labor costs, and operating expenses related to project execution.

With this guarantee approval, Hyundai Rotem can provide indirect financial support to partner companies and also reflect this achievement in the "Win-Win Growth Index," which is calculated by the Win-Win Growth Committee, a private autonomous organization, based on large companies' support performance for small and medium enterprises.

It is also positive that the core of this joint project, the distributed power high-speed train, is expected to show steady demand in domestic and international railway markets in the future. The distributed power high-speed train has power units distributed across each car, offering superior acceleration and transport capacity, making it optimized for the domestic railway environment where station intervals are short, compared to power-concentrated high-speed trains that have power units only at the front and rear of the train.

Additionally, since it has high energy efficiency and emits fewer pollutants, it is expected to be advantageous for entering the global high-speed train market aiming for carbon neutrality.

A Hyundai Rotem official said, "We will continue to strengthen the win-win cooperation system with domestic small and medium-sized partner companies and transform into an eco-friendly railway vehicle company prepared for the carbon-neutral era."

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