Auto industry becoming more competitive: official

By Lee Joon-seung
SEOUL, April 8 (Yonhap) -- South Korea's auto industry is taking steps to boost
its competitiveness amid the current economic slump, which may allow Seoul to
help boost sales through support measures, a government official said Wednesday.
Chung Jae-hoon, head of the Knowledge Economy Ministry's core industry bureau,
told reporters that changes to improve productivity, streamline operations and
cut costs have been made since March 24, when CEOs of local carmakers announced
self-help programs.
"There is active debate between labor and management to take steps to cope with a
sharp decline in sales, and the government hopes that further progress will be
made before a formal blueprint to help the industry is announced," he said.
Senior policymakers have been calling on labor unions and management to do their
part before Seoul takes concrete measures to assist the industry that has been
hit hard by the current economic slump.
The ministry in charge of the country's industrial policy said last month that it
could consider slashing acquisition and registration taxes that could temporarily
benefit around 5.5 million car owners in the country. It added that extensive
research and development support could be given as an additional incentive to
push for industry-wide changes.
Heads of carmakers like Hyundai, Kia, GM Daewoo, Renault Samsung and Ssangyong
agreed last month to strive for greater flexibility in production and labor, even
though this proposal was deemed inadequate and similar measures have been opposed
in the past.
Since then, carmakers convinced unions to allow several cars to be made from a
single assembly line, while Ssangyong said earlier in the day that it will lay
off 37 percent of its workforce. The company is currently under court
receivership, with its future to be decided by creditors.
Chung, however, made clear that the government did not base its plan to help
carmakers on any pre-set goals or the extent of reforms made in their
labor-management relations.
Other officials said that despite the positive changes, Seoul has not set a date
on when a definitive support plan will be made.
"The plan is not centered solely on helping carmakers, but will also help fuel
domestic consumption that is vital for business investment and jobs," a senior
official said.
He said the government is currently monitoring sales figures for domestic cars
and other telltale indicators before making a final commitment.
"Any effort that is given will not in any way distort trade, since no measures
reviewed discriminate against foreign carmakers in the least, and they are
actually far smaller in scope than those forwarded by foreign governments," he
stressed.
yonngong@yna.co.kr
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