The automobile industry of South Korea is taking a direct hit from the spread of COVID-19 in the United States and Europe. Under the circumstances, the Ministry of Trade, Industry and Energy came up with a project on March 30 in order to stabilize the business of auto parts manufacturers.
Global automakers are going through a hard time in terms of both production and sales. Most of them already shut down their manufacturing facilities across the world. Hyundai Motor Group is no exception, either.
This is particularly serious in that the automobile and auto parts industries take up a very large portion of regional economies. According to the Korea International Trade Association, regions heavily dependent on those industries showed a substantial decline in exports in January and February, when the spread began in earnest. For example, exports from Daegu City and North Gyeongsang Province, which are home to more than two-thirds of South Korean auto parts manufacturers, dropped 19.4 percent and 15.5 percent in January this year, respectively.
The government is planning to invest 10 billion won in the project in order to help such manufacturers refine their production technologies. Companies in the project are expected to be able to enhance the added value of their parts by applying existing technologies and working on new products.