Korean Automakers Request Government for Liquidity and Tax Support

Korean auto and auto parts makers requested the government for liquidity support and temporary exemption from the acquisition tax due to significantly diminished sales.

Companies from the automotive industry are having difficulties paying fixed costs, such as salaries due amid the pandemic.

They also requested for measures to boost domestic demand.

The car and auto parts industries were already exempted from consumption tax but also wanted payment deadlines to be extended by as much as nine months for other obligations, including value-added tax, and tariffs for automobiles.

The requests were made during the meeting between the Ministry of Trade, Industry and Energy, Minister Sung Yun-mo met, and representatives of the country’s automakers to hear about difficulties they are facing due to COVID-19.

The industry representatives in the meeting were Hyundai Motor Group President Gong Young-woon, Kia Motors President Song Ho-sung, SsangYong Motors President Ye Byung-tae, GM Korea CEO Kaher Kazem, Renault Samsung CEO Dominique Signora, and heads of eight local auto parts makers.

Sung said the government would review support measures with other concerned ministries.

The country’s automotive exports declined by 45.8 percent from April 1 to April 17, from the same period in 2019.

Dealerships in European and North American markets, which account for 63.1 percent of overseas sales of the five major Korean carmakers, have suspended operations due to COVID-19.

Consequently, carmakers were forced to cut production in April, bringing down production volume by 19.2 percent during the said period.