Expansion of China-Centric Ecosystem... Urgent Need to Strengthen Competitiveness of Korea's Automotive Industry

'Future Car Industry Development Strategy Forum' Held

"Global Automakers Expanding Cooperation with Chinese Parts Suppliers"

"Domestic Production Promotion Tax System to Drive Industrial Ecosystem Transition"

The Korea Mobility Society, in collaboration with the Korea Automobile Mobility Industry Association, held the 'Future Car Industry Development Strategy Forum' at the Automobile Hall on May 8. This forum was organized to present the major trends from the '2026 Beijing Motor Show,' which took place in Beijing, China last month, and to seek policy directions to strengthen the competitiveness of the domestic electric vehicle industry.

First, Koo Min Jung, President of the Korea Mobility Society, presented on the 'Major Trends and Implications of the 2026 Beijing Motor Show,' stating, "At the 2026 Beijing Motor Show, the ecosystems of autonomous driving, electric vehicles, and smart cars in China emerged as key issues." He explained, "Global automakers are expanding cooperation with Chinese parts suppliers and automakers to enhance price competitiveness."

On the 8th, Chung Daejin, chairman of the Korea Automobile Mobility Industry Association, delivered a congratulatory speech at the 'Future Vehicle Industry Development Strategy Forum.' KAMA

He went on to say, "At the 2025 German Motor Show, concerns were also raised about the so-called ESR (Empty Shell Risk), where only the brand remains and core components depend on the Chinese supply chain." He emphasized, "In this rapidly changing automotive industry environment, comprehensive government-level support is urgently needed to strengthen the competitiveness of the domestic automotive ecosystem."

Sungjun Kim, CEO of Golden Oak Tax Corporation, presented on 'Policy Directions to Strengthen the Competitiveness of the Electric Vehicle Industry,' stating, "Due to major countries' incentives for domestic production and the market expansion of low-priced Chinese electric vehicles, there are concerns about lower domestic electric vehicle production rates and the potential relocation of production bases overseas."

He added, "The case of market encroachment by China in the past solar energy industry could be repeated in the electric vehicle industry." He continued, "Since major countries are competitively implementing domestic production support policies, such as the EU's imposition of countervailing duties on Chinese electric vehicles and Japan's introduction of a domestic production promotion tax system for strategic fields, it is necessary to introduce a domestic production promotion tax system in consideration of the national economic importance of the automotive industry."

Daejin Jeong, Chairman of the Korea Automobile Mobility Industry Association, commented, "At the recent Beijing Motor Show, global automakers unveiled new vehicles developed in collaboration with Chinese autonomous driving company Momenta, showing that Chinese companies are emerging as both partners and threats." He further explained, "In the transition to future cars, practical support is needed for technology development, facility investment, and workforce training so that parts manufacturers can maintain their competitiveness."

On the 8th, participants are engaged in discussion at the 'Future Automotive Industry Development Strategy Forum.' Photo by Lee Seungjin

During the designated discussion session moderated by Emeritus Professor Jonguk Lee of Seoul Women's University, participants agreed on the urgent need for policy support to maintain the domestic manufacturing base in response to intensifying global competition in the electric vehicle sector.

Professor Jeongkyu Park of KAIST explained, "Japan is directly supporting about one-third of battery facility investments under the Economic Security Promotion Act and is implementing phased subsidies to secure a domestic battery cell production capacity of 150 GWh by 2030." He further introduced, "Toyota received 117.8 billion yen in support from a total project cost of 330 billion yen in its first subsidy program in 2023."

Seongmin Oh, Policy Planning Director at the Korea Automobile Mobility Industry Association, explained, "Electric vehicle production is directly linked not only to finished vehicles but also to the business foundations of upstream and downstream industries such as materials and parts." He added, "Among the approximately 20,000 parts suppliers in Korea, more than 95% are small and medium-sized enterprises with annual sales under 30 billion won, and they are struggling with business conversion due to low profitability and difficulties in securing clients."

He emphasized, "The domestic production promotion tax system is not limited to supporting automakers but can serve as a policy tool to create real demand across the entire industry, including partner companies, and to drive the transition of the future vehicle industry ecosystem."

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