Hyundai Motor Group to help auto parts makers transition to EV business
Prime Minister Han Duck-soo, center, Chung Euisun, fourth from right, chairman of Hyundai Motor Group, and officials from the Ministry of Trade, Industry and Energy; the Ministry of SMEs and Startups; the Fair Trade Commission; the Korea Automotive Technology Institute; the Korea Fair Trade Mediation Agency; and the Foundation of Korea Automotive Parts Industry Promotion pose after signing an agreement to support local auto parts companies in transitioning to the electric car business at Hyundai's research center in Hwaseong, Gyeonggi Province, Wednesday. Courtesy of Hyundai Motor Group
Automotive giant, gov't forge ties to foster EV ecosystem
By Baek Byung-yeul
Hyundai Motor Group has joined hands with the government to support local auto parts manufacturers to get into the rapidly-growing electric vehicle (EV) business, as it is anticipated that the domestic companies will have difficulties in the near future when the entire car industry is transitioning from traditional combustion engine-powered cars to EVs, according to the automotive group, Wednesday.
The Korean automotive giant signed a memorandum of understanding with government agencies such as the Ministry of Trade, Industry and Energy; the Ministry of SMEs and Startups; the Fair Trade Commission; the Korea Automotive Technology Institute; the Korea Fair Trade Mediation Agency; and the Foundation of Korea Automotive Parts Industry Promotion at its research center in Hwaseong, Gyeonggi Province.
“While the combustion engine-powered car parts industry is expected to face difficulties due to the conversion to EV, the automotive group agreed with the government agencies to support the local auto parts industry so that they can continue their investment and improve their capabilities,” a spokesman of the automotive group said.
Under the agreement, Hyundai Motor Group will provide financial support by creating a support fund and expanding its price adjustment system, which raises the price of goods that parts companies supply to the group when the price of raw materials rise. It will also offer consultative and education services to the local auto parts companies.
Hyundai added that it will push for 5.2 trillion won ($3.6 billion) in support so that the group can help their over 5,000 local partners accelerate the transition to the EV business.
“The local automotive industry is facing more difficulties due to the global supply chain crisis and this is the time to respond to the industry's successful transition,” Chung Euisun, chairman of Hyundai Motor Group, said.
"For the successful transition of the automotive industry, carmakers, the auto parts industry, the government and related organizations must form a team to build an organic cooperative system. We will further expand co-prosperity and support for the parts industry to strengthen competitiveness in the future car era,” the chairman added.
Prime Minister Han Duck-soo also said, “The government will support the rapid and flexible transition of the parts industry to future cars and create an ecosystem that innovates and where large and small-sized companies coexist.”
The industry ministry will support the technology development of the parts companies that invest in future car technologies, such as eco-friendly cars and autonomous driving technology, and expand funding support for them. Also, the ministry plans to foster software engineers in the self-driving field and develop an educational program on the maintenance of EVs.
The ministry of small business will support the expansion of the price adjustment program that Hyundai Motor Group is operating and create a 50-billion-won R&D fund with the automotive group to support the local parts makers' research activities.