The auto parts industry is urging the introduction of tax incentives to strengthen domestic electric vehicle (EV) production. On June 17, the Korea Automobile Industry Cooperative issued a statement during a meeting at the Automobile Industry Hall in Seocho-gu, Seoul, expressing concerns over the weakening of domestic production capabilities and the shrinking ecosystem of the auto parts industry. They called for the active promotion of a domestic production tax incentive for electric vehicles.
The industry is currently struggling due to the expansion of overseas production by major automakers and increased price competitiveness from Chinese electric vehicle manufacturers.
The cooperative stated, "While major countries are actively maintaining their domestic production bases and stabilizing supply chains through production subsidies and tax support, South Korea remains limited to a structure of purchase subsidies, which does not translate into increased domestic production in the electric vehicle market. Support policies linked to production are crucial for the sustainability and future competitiveness of the automotive industry."
Representatives from the auto parts industry, including Lee Taek-sung, chairman of the cooperative, Moon Seong-jun, chairman of the Hyundai-Kia Cooperation Council, and Park Kyung-bae, chairman of KG Mobility Partners, attended the event.
The cooperative warned, "The automotive industry is an interconnected ecosystem of finished vehicles and numerous parts manufacturers. If production of finished vehicles declines or production bases shift overseas, the impact will ripple throughout the entire industrial ecosystem, including the auto parts sector."
* This article has been translated by AI.
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