South Korea to encourage parts suppliers for next-generation cars


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Seoul: South Korea’s top economic decision-maker said the government plans to provide support to help around 1,000 auto parts makers transform into key suppliers of next-generation automobiles by 2030.

Finance Minister Hong Nam-ki said the country plans to establish a 500 billion won ($ 448 million) fund to support research and development and investment in facilities in the next-generation vehicle industry.

“There is a great need to take the lead in the markets for new generation vehicles and related parts,” Hong said at a government meeting on new industries.

Korean automakers are accelerating the development and production of next-generation automobiles, including autonomous and hydrogen vehicles.

But local auto parts makers are struggling to keep up with the changing trend due to a lack of technology and manpower, the Yonhap News Agency reports.

South Korea plans to allocate 282.6 billion won this year to help auto parts companies transform their business portfolios to cover next-generation automobiles.

South Korea predicts that environmentally friendly cars, including hydrogen fuel cell cars, will account for 30% of total cars registered in the country by 2030, up sharply from estimate current of 3%.

Outbound auto parts shipments amounted to $ 18.6 billion in 2020, down 17.2% year on year amid the COVID-19 pandemic.

South Korea is a memory chip powerhouse, led by Samsung Electronics, the world’s largest memory chip maker, and its smaller rival SK hynix Inc. But they are relatively behind in the development of memoryless chips, including system semiconductors.

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