Hyundai-Kia to pay subcontractors in advance

Hyundai-Kia Automotive Group has decided to make an advance payment to its subcontractors to help improve their cash flow.

About two weeks ahead of the Chuseok holidays, the Korean equivalent of Thanksgiving, the country’s largest automaker said Sunday it will pay money for employees’ salaries at subsidiaries and raw material suppliers up to one month earlier than their due dates.

Under the plan, 1 trillion won out of 1.8 trillion will be given out to 1,150 subcontractors in advance.

The group makes for domestic payments every Thursday, but considering the three-day holiday, it will make the payments earlier.

In addition, around 200 affiliates in financial trouble will receive money slated for October.

The group will monitor the early payment that will be given to subsidiaries immediately.

“We expect that this measure will help subcontractors settle financial problems,” a representative of the group said.

“We will continue to financially support those making efforts in technical development and quality improvement.”

Meanwhile, the group has recently announced that it will support secondary subcontractors, which are more financially vulnerable.

In a bid to solidify their financial soundness, Hyundai-Kia has checked primary subsidiaries about payment on a regular basis.

Recently, it led subcontractors to reach a win-win agreement and held a seminar to announce its plan.

Hyundai-Kia Automotive Group has strived to stabilize subcontractors’ management and fortify global competitiveness on its way to nurturing independent small and medium enterprises (SMEs).