Auto Parts Industry Fails to Keep Pace with Future Vehicle Transition... "Urgent Need for Expanded Government Support for Future Vehicle Transition"

*This content was translated by AI.

The domestic auto parts industry is facing significant hurdles in its transition to future vehicles, grappling with multiple challenges including an uncertain future vehicle roadmap, a shortage of specialized personnel, and funding difficulties. Consequently, voices are growing louder calling for urgent government-led industrial policies, such as the introduction of tax incentives for domestic electric vehicle production, and support for the "Jeonju Miracle."

The Korea Automotive Mobility Industry Association (KAIA) held a "Field Meeting of the Auto Parts Industry for Transitioning the Automotive Ecosystem" on the 22nd at the main conference hall of Hyolim Precision Co., Ltd. in Pyeongtaek, Gyeonggi Province. This meeting was convened to assess the current status of the auto parts industry's transition to future vehicles and to identify policy recommendations aimed at strengthening the competitiveness of the domestic automotive production base and parts ecosystem.

Parties from the auto parts industry attending the meeting today expressed that they are facing significant difficulties in business transition due to market uncertainty, intensifying competition driven by the rapid growth of Chinese electric vehicles, and limitations in securing specialized personnel. In particular, small and medium-sized and mid-sized parts companies are currently suffering from a double burden of having to maintain their existing internal combustion engine production systems while simultaneously investing in future vehicle responses, leading to challenges in securing funds and worsening profitability.

Attendees requested expanded financial and tax support that parts companies can flexibly utilize during the development and Yangsan stages to mitigate such investment uncertainty. They also proposed establishing a transition support system based on a consortium involving vehicle manufacturers, parts companies, and materials companies, and strengthening "Jeonju Miracle" support through the provision of technology roadmaps and the construction of testing and certification infrastructure. Furthermore, they emphasized the need to alleviate the on-site labor shortage by fostering research and development and production personnel in the future vehicle sector, expanding the utilization of foreign workers, and operating working hour systems flexibly.

KAIA Chairman Jeong Dae-jin emphasized, "We must promptly introduce tax incentives for domestic electric vehicle production to maintain and expand the domestic production base, thereby supporting the electrification transition of the parts industry, securing work orders, and bolstering future vehicle investment capacity." He also requested support for building a data platform that the industry can jointly utilize to respond to strengthening global environmental regulations such as those in the EU.

Lee Taek-seong of the Korea Automotive Industry Cooperative Association Lee (President) emphasized the importance of co-growth between vehicle manufacturers and the parts industry and mentioned the significance of ecosystem stability, while Im Kwang-hoon, Deputy Director of the Korea Automotive Research Institute, proposed expanding R&D investment in AI, autonomous driving, and electrification fields and advancing the future mobility ecosystem. KG Mobility Partners Chairman Park Kyung-bae also expressed expectation that if a production-linked support system is established, companies will be able to invest more stably.

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*This content was translated by AI.