South Korean state-owned Korea Trade Insurance Corporation (K-Sure), with the support of Hyundai Motor Group (HMG) and Hana Bank, has launched a new KRW 630 billion (US$ 450 million) fund to provide financial support to the country’s automotive component manufacturers, following the recent introduction of import tariffs in the US.
The launch event in Asan was attended by South Korea’s Trade, Industry and Energy Minister, Kim Jung-kwan; K-Sure’s CEO Jang Young-jin; HMG’s President Sung Kim; and Hana Bank’s CEO Lee Ho-sung.
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The aim of the programme is to provide financial support to domestic component suppliers of Hyundai Motor and Kia Corporation that are facing declining sales following the recent introduction of import duties in the US. Hana Bank has contributed KRW 30 billion to the fund, while HMG has made available KRW10 billion won.
K-Sure confirmed that under the programme, it will provide support in the form of preferential financing to component manufacturers selected by HMG, including low-cost loans with interest rates up to 2 percentage points below market rates, as well as extended guarantees.
Sung Kim said in a statement: “In a trade environment that has become more challenging following the recent US tariffs, this new financing programme will provide significant support to the auto parts market and, from an original equipment manufacturer perspective, is expected to help stabilize the supply chain.”
South Korean automotive components manufacturers now incur a 15% import tariff on their exports to the US, compared with zero tariffs until recently under the Korea-US Free Trade Agreement. HMG is encouraging key suppliers to shift production to the US to help reduce costs.
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