Gov't reviews plan to boost auto industry competitiveness

SEOUL, April 14 (Yonhap) -- The government said Tuesday that it is reviewing a
plan to improve the overall competitiveness of South Korea's auto industry and
better allow companies to cope with the worldwide economic crisis.
The working level plan calls for support to be directed toward three to four
carmakers to allow them to compete more effectively with foreign rivals in the
face of plummeting sales.
South Korea is the fifth largest auto-manufacturing country in the world after
Japan, China, the United States and Germany with total production reaching 3.83
million units as of 2008. It, however, saw its sales drop by around 15 percent in
the first three months of this year as consumers in both the domestic and foreign
markets cut back on spending.
The report -- compiled earlier in the year -- does not go into details, but could
result in one to two companies being excluded from support, a move that could
trigger industry-wide restructuring.
It said concentrated research and development support in such areas as eco-car
production could boost, competitiveness and overall production gains so the
country's ranking in the industry may go up one notch to fourth place.
As of 2007, Hyundai Motor Co., Kia Motors Corp., GM Daewoo Auto & Technology Co.,
Renault Samsung Motors and Ssangyong Motor Co. accounted for 5.5 percent of all
cars sold in the world. The plan could raise numbers to 10 percent or 10 million
units in the future.
The ministry in charge of the country's industrial policy, meanwhile, said that
while the plan was made, it is not the official position of the government, but
being drawn by working level officials and industry analysts.
"It is part of the wider review process to help companies overcome the economic
crisis," said Kim Sung-jin, head of the components and materials division.
He, added that the government is not in a position to dictate change in the auto
industry since such a move can only be taken by the market.
Other officials pointed out that Ssangyong, a unit of China's Shanghai Automotive
Industry Corp., is currently under court receivership, so government intervention
is impossible, while GM Daewoo and Renault Samsung are both foreign-invested
companies whose key management decisions are made abroad.
yonngong@yna.co.kr
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