Hyundai Motor Group plans to provide support for the local auto industrial ecosystem with a mutual cooperation program worth nearly 1.7 trillion won (15.1 billion U.S. dollars) to overcome the industry’s slump with its suppliers.
Hyundai announced a program for cooperation with its suppliers by providing them with management stabilization funds, early payment of research and development expenditures, provide investment funds for future cars including hydrogen vehicles, and promote win-win partnerships among its contractors and subcontractors.
The amount of assistant funds is the largest ever for Hyundai. The lion’s share is allotted to early payment of research and development spending by its parts suppliers. Hyundai plans to provide nearly 1.5 trillion won (13.3 billion dollars) from next year until 2023. It usually takes five to 10 years for autoparts makers to proceed from research to mass production. During the research period, suppliers have to depend on bank loans for facility investments. “We plan to ease funding burdens on parts makers by paying investment and research funds five years in advance,” a Hyundai official said.
In addition, Hyundai plans to raise an additional 140 billion won (124.4 million dollars) to the existing fund worth 455 billion won (444.4 million dollars) to use the sum as future growth funds. It will also provide 15 billion won (13.3 million dollars) to provide emergence management assistance and up to 44 billion won (39.1 million dollars) next year to facilitate investment for increased production of its hydrogen fuel cell vehicle Nexo.
Hyundai said it will also expand its direct and indirect support for secondary and tertiary suppliers, providing 15 billion won (13.3 million dollars) to help some 800 of them build “smart plants” and another 3 billion won (26.7 million dollars) to help 240 of them conduct export marketing.
Hyoun-Soo Kim firstname.lastname@example.org