Public-Private Cooperation
The Ministry of Trade, Industry & Energy announced on February 7 that it launched the Automobile Industry Development Committee and held its first meeting, which was presided over by Minister Joo Hyung-hwan.
At the meeting, the committee said that it would focus on seven different policy agenda: enhancement of the competitiveness of future cars; innovation and convergence in auto parts industry ecosystems; creation of new service industry segments associated with the automobile industry; innovation of the export structure and strategic use of trade policy; balance between the development of the industry and environmental and safety regulations; labor-management relations in compliance with international standards; and establishment of an entity in charge of industrial policy planning. For these purposes, the committee is going to run subcommittees and come up with specific action plans in the first half of this year.
In the meantime, the ministry is planning to concentrate its assistance this year on small and medium-sized auto parts manufacturers to accelerate the development of the automobile industry. To this end, the ministry increases the number of smart factories, which are currently run by 800 or so local auto parts manufacturers, to at least 2,500 by 2020. At the same time, it prepares approximately 110 billion won for the R&D of sensors for use in self-driving cars and the like while training more than 400 engineers specialized in future car technology. The number of electric vehicle chargers is to be doubled to 20,000 by the end of this year and more incentives are to be given to electric vehicle owners so that this type of cars can take up 1% of the new car market.
In response, South Korean automakers invest a total of 4.7 trillion won in future car development this year. In addition, they are going to try to get rid of misunderstandings about the KORUS FTA so that their exports to the United States can have a chance of recovery. In this context, they are going to emphasize that car exports from the U.S. to South Korea have increased by an annual average of 35.5% since the signing of the KORUS FTA, Hyundai Motor Company and Kia Motors are currently employing 6,700 workers in the U.S. and approximately 25,000 employees are working for 63 South Korean auto parts manufacturers in the U.S.