K-SURE to provide $455.4 mil. in financing support to auto parts suppliers
Cars are waiting to be exported at a port in Pyeongtaek, Gyeonggi Province, Aug. 7. Yonhap
The Korea Trade Insurance Corp. (K-SURE) will provide up to 630 billion won ($455.4 million) in special financing support for small and medium-sized suppliers of Korean automotive giants Hyundai Motor Co. and Kia Corp. to help reduce their financial burden stemming from U.S. tariff measures, the industry ministry said Monday.
The special support package, aimed at offering low-interest loans to Korean auto parts manufacturers, includes a combined 10 billion-won special contribution from Hyundai and Kia, the first special contribution made by private companies to K-SURE, along with a 30 billion-won contribution from Hana Bank, according to the Ministry of Trade, Industry and Energy.
The three sides held a cooperation agreement signing ceremony for the special program Monday at the headquarters of DY Auto Corp., an auto parts manufacturer based in the central city of Asan.
The low-interest loans will help auto parts companies stably supply their products to the carmakers and also make investments to enhance their fundamental competitiveness while navigating export uncertainties caused by 25 percent U.S. tariffs on all imported cars, the ministry explained.
Under the program, suppliers of Hyundai and Kia can take out loans at interest rates that will be up to 2 percentage points lower and under preferential terms, such as longer guarantee periods and lower guarantee fees.
"Through the program, we were able to secure financing on more favorable terms to ensure the stable supply of our products and make proactive investments in our facilities to boost production," DY Auto Chief Executive Officer (CEO) Im Youn-chan said during the signing ceremony.
Hyundai Motor President Sung Kim said the program will "greatly" help auto parts suppliers, as well as automakers, facing mounting difficulties due to Washington's tariff scheme.
Industry Minister Kim Jung-kwan vowed efforts to devise additional measures to help export industries find alternative markets and strengthen their competitiveness amid the rise in global trade protectionism.
" Korea's exports in the January-July period increased despite domestic political uncertainties and U.S. tariff measures, thanks to the tireless efforts of businesspeople working on the front line of exports," Kim said.
In the first seven months of this year, Seoul's exports reached $395.5 billion, up 0.8 percent from a year earlier, according to the ministry.