Korea’s car companies discuss challenges

Representatives of Korea’s major automakers and parts makers and industry officials gathered in Seoul Wednesday to discuss ways to breathe new life into the sluggish sector. The chief executives of the big five automakers — Hyundai Motor, Kia Motors, GM Korea, Renault Samsung and Ssangyong Motor — and their local parts makers and industry associations explored ways to tackle daunting challenges facing the industry.

Korea’s auto industry is going through a hard time after GM Korea shut down its underutilized Gunsan plant in May, and Hyundai and Kia have been posting generally disappointing earnings this year.

Small and medium-sized companies that make parts for the carmaker were more vulnerable to falling sales, with more than one-third of such Korean auto parts makers posting losses in the first half of this year, data by the think tank Korea Institute for Industrial Economics and Trade showed.

They are also in the crosshairs as the United States is weighing slapping tariffs on foreign-made autos and auto parts on national security grounds.

The participants called for the government to boost domestic demand, provide financial assistance to cash-strapped parts makers and lower regulations in emerging sectors, such as autonomous and electric vehicles.

The automakers said they will seek ways to maintain over 4 million units in domestic car production and raise the number to 4.5 million by 2025.

Hyundai Motor, the nation’s leading automaker, said it will invest 220 billion won ($193.8 million) over the next two years to develop an advanced lineup of its hydrogen-fuel electric car Nexo, with a goal of releasing over 30,000 units in the domestic market in 2022.

GM Korea said it will hold trade shows to help its local contractors tap into the global market and supply 70 billion won in subsidies for small- and medium-sized contractors.