▲ Auto parts industry urges introduction of tax incentives to promote domestic production
The automotive parts industry has called for tax support to expand the foundation for electric vehicle (EV) production within South Korea.
The Korea Auto Industries Cooperative Association (KAICA) issued a statement today (June 17) at the Korea Automobile Industry Hall in Seocho-gu, Seoul, stating, "Concerns are growing over the weakening of domestic production bases and the contraction of the automotive parts industry ecosystem." The association requested that the government "actively pursue the introduction of a tax incentive system to promote domestic EV production."
The association emphasized that the burden on the parts industry has increased due to automakers expanding overseas production and the growing price competitiveness of Chinese EV manufacturers.
"The automotive industry is one where finished car manufacturers and numerous parts suppliers are closely interconnected," the association said. "If finished vehicle production declines or production bases are relocated overseas, the impact will inevitably spread throughout the entire industrial ecosystem, including the parts sector."
The association further pointed out, "While major countries are actively working to maintain domestic production bases and stabilize supply chains through production subsidies and tax support, South Korea remains focused on purchase subsidies, making it difficult to see the expansion of the EV market as directly linked to an increase in domestic production."
"Policy support linked to production will be a crucial policy tool for maintaining the sustainability and future competitiveness of the automotive industry," the association said, urging support from the government and the National Assembly.
The event today was attended by industry representatives, including Lee Taek-sung, Chairman of the KAICA; Moon Sung-jun, Chairman of the Hyundai-Kia Suppliers Association; and Park Kyung-bae, Chairman of KG Mobility Partners.
(Photo courtesy of Korea Auto Industries Cooperative Association, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.