KAIA Chairman: "Strengthen K-Mobility Competitiveness Through FTA Expansion and Improvement of Subsidy System"

*This content was translated by AI.

The Korea Automotive Industry Association (KAIA) held the 47th Automotive Mobility Industry Development Forum at the Automobile Hall on May 28. The forum was conducted under the theme of shifting global trade paradigms and strengthening K-mobility competitiveness.

KAIA Chairman Jung Dae-jin stated that major export markets, including the United States and the European Union, are protecting their domestic industries through tariffs and industrial support measures. Jeong (Chairman) diagnosed that Chinese electric vehicle companies are expanding their entry into advanced markets and the entire parts ecosystem by leveraging autonomous driving and AI technologies. In response, he emphasized the urgent need to proactively respond to policy changes in major countries, secure new markets through FTA expansion, and simultaneously improve the subsidy system and introduce a domestic production promotion tax system.

Korea University Professor Cho Soo-jeong explained that as China's electric vehicle production exceeds 70% of the global total, major countries have begun intensifying industrial policy competition linking tariffs, tax policies, and investment reviews. Professor Cho suggested that trade measures and strengthened foreign investment security reviews must be pursued alongside the introduction of a domestic production promotion tax system for electric vehicles and diversification of trade networks.

Jung Ji-hyun, a research fellow at the Korea Institute for International Economic Policy, analyzed that China is building a hub network combining production, supply, and infrastructure in ASEAN and Latin America. Research Fellow Jung stated that since future competition will expand to the entire ecosystem, strategies linking overseas hubs with domestic foundations must be connected, and inducement-type policy support, such as a domestic production promotion tax system for electric vehicles, must be strengthened to prepare for a contraction in domestic production.

During the designated discussion chaired by Sogang University Professor Heo Yoon, opinions converged on the core importance of maintaining a domestic production base. Park Sung-kyu, Executive Vice President of HMG Management Research Institute, stated that in the era of economic security, the government must support the maintenance of the domestic production base in terms of employment and investment. Song Seong-dae, Director of the Korea Chamber of Commerce and Industry, argued for a shift from subsidy strategies for mass-market adoption to achieve carbon neutrality toward subsidy strategies to protect the strategic industry ecosystem. Kim Kyung-yu, a committee member of the Korea Institute for Industrial Economics and Trade, diagnosed that given the export-oriented domestic industrial structure, government support for charging infrastructure and autonomous driving is essential.

Kim Young-hoon, Director of the Korea Automobile Industry Cooperative, pointed out that among newly registered electric vehicles in Korea from January to April 2026, Chinese-made vehicles accounted for 31.1%, indicating that the current purchase subsidy structure does not lead to domestic production. Director Kim emphasized that to alleviate the dual burden on the parts industry in responding to future vehicles, a policy mix combining the introduction of a domestic production promotion tax system for electric vehicles with financial and employment support is needed, going beyond the current tax credit system centered on facility investment.

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*This content was translated by AI.