Three major Hyundai Motor units have decided to pay their subcontractors in advance ahead of the Chuseok holidays.
There are about 2,800 Hyundai subcontractors, with the advance payments for auto parts supply to total 1.15 trillion won (US$1.06bn), group officials told the Korea Herald.
Many small- and medium-sized companies in Korea badly need cash in September and October because many of them provide a bonus for Chuseok, the Korean thanksgiving holiday which falls on 11-13 September.
The three units are Hyundai Motor, Kia Motors and Hyundai Mobis. “Our decision comes as part of efforts to ease the burden of (a certain number of) suppliers suffering from lack of funds,” a spokesman said.
Last year, Hyundai announced “mutual growth with suppliers” and said it will push ahead with a string of steps aimed at strengthening the competitiveness of its subcontractors, most of which are small- and medium-sized enterprises.