South Korean vehicle manufacturers this week called on the government to provide up to KRW32 trillion (US$25.9bn) in emergency loans through banks to help them through the global COVID-19 coronavirus pandemic.
The Korea Automobile Manufacturers Association (KAMA) said local vehicle manufacturers told trade minister Sung Yun-mo they needed fresh loans totaling KRW42trn combined in the next four months to operate plants, maintain staffing levels and cover other costs, according to local reports.
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The automakers said they can afford to finance KRW10tn of that amount from internal resources and facilities.
The association’s president Jeong Marn-ki also confirmed local vehicle manufacturers were calling for tax cuts, including reduced corporation tax, to help them weather the crisis.
Hyundai Motor Group president Gong Young-woon said his company needed at least KRW10 trillion in emergency loans to help the company get through the next four months, as domestic sales and export come under increasing pressure.
Operations at the group’s plants in the US, Mexico, India and Brazil are currently suspended in response to local government guidelines and in line with market demand.
In a separate report, Hyundai Motor said it planned to raise KRW300bn (US$243m) next month by selling corporate bonds.
Other South Korean manufacturers including GM Korea, Renault Samsung and Ssangyong have also requested emergency loans and tax cuts.
The country’s five leading automakers reported a 9.2% decline in combined global sales to 1,687,905 vehicles in the first quarter of 2020.
Vehicle production in South Korea declined by over 19% to 171,535 units in the first 17 days of April, according to data released by the ministry of trade, with exports plunging by almost 46% to 48,800 units.
