The Ministry of Trade, Industry and Energy announced on February 7 that Trade, Industry and Energy Minister Joo Hyunghwan hosted the first meeting of the public-private ``Automotive Industry Development Committee'' in Seoul and discussed a range of strategies for the industry that is at a turning point.
The Ministry launched the committee to examine complicated issues facing the Korean automotive industry and discuss mid- and long-term strategies, especially for future car technologies. The committee comprises representatives from across the industry, research institutes and academia.
“For the Korean automotive industry to secure sustainable competitiveness, we need the united efforts of the public and private sectors, not just by individual companies,” Minister Joo said in an opening statement, pointing out at challenges facing the industry such as intensifying competition in the market for future cars, emergence of Chinese and Indian manufactures and growing protectionism. “For this, we are launching today the public-private ‘Automotive Industry Development Committee’ as a policy control tower.”
During the meeting, Minister Joo discussed the government’s strategies and plans based on the seven policy agenda items suggested by the Korea Institute for Industrial Economics and Trade based on opinions gathered from industry experts. The agenda includes the strengthening of Korea’s competitiveness in future car technologies; innovations in the ecosystem of suppliers; creation of new auto-related service industries; overhaul of the export structure; balance between the industry’s development and environmental and safety regulations; improvement of labor relations; and establishment of a policy control tower.
Minister Joo underscored that for global expansion, it is important for the Korean industry to secure competitive advantage in the market for future car technologies, such as environment-friendly vehicles and autonomous cars. Under the goal to have electric vehicles (EVs) make up a 1-percent share of new car sales this year, the Ministry will add 10,000 more EV chargers to the existing 10,000 within this year and offer various incentives to EV buyers and drivers, the Minister said.
In order to innovate production systems across the industry and create new auto-related service industries, the Ministry will support small- and medium-sized component suppliers in particular, Minister Joo said. Around 2,500 suppliers will have digitalized factories by 2020, compared to the current 800, while about 110 billon won will be injected into research and development on autonomous car sensors and other key components, the Minister said. He added the Ministry will promote strategic alliances between carmakers and other industries.
Minister Joo also underscored the importance of trade policy changes in boosting car exports in slowdown, such as the diversification of markets. Regarding concerns over trade with the U.S., he said the Ministry will explain to the new U.S. government the benefits of the Korea-U.S. Free Trade Agreement including the double-digit growth in Korea’s imports of American vehicles and job creation by Korean firms in the U.S. Hyundai Motor and Kia Motors, for example, are together employing around 6,700 locally, and 63 suppliers hire about 25,000.
Furthermore, the Ministry will seek balance between the industry’s competitiveness and environmental and safety regulations while labor relations issues must be addressed, Minister Joo emphasized.
In order to carry forward the strategies, the government will create a working group for each field and set up specific action plans within the first half of 2017.
The committee’s first meeting was attended by the CEOs of five Korean automotive makers including Hyundai Motor President Chung Jin-haeng, Kia Motors President Park Han-woo, GM Korea CEO James Kim, Korea Automobile Manufacturers Association President Kim Yong-geun and Korea Auto Industries Coop. Association Chairman Shin Dal-suk as well as heads of research institutes and academic experts.