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Carmakers to suffer 28 tln-won cash shortage if virus prolongs

All News 15:19 April 10, 2020

SEOUL, April 10 (Yonhap) -- South Korean carmakers and auto parts firms will suffer a cash shortage of over 28 trillion won (US$23 billion) if the coronavirus outbreak continues to affect the automobile industry for the next four months, a local industry association said Friday.

In a meeting with industry officials and auto experts, the Korea Automobile Manufacturers Association (KAMA) estimated that there will be an urgent cash demand worth a combined 28.1 trillion won for local carmakers and auto parts makers if car sales continue to drop and supply disruptions take place.

Carmakers will need 14.4 trillion won in cash for fixed costs and wages to keep their workforces, while some 13.7 trillion won is necessary for auto components makers over the next four months if business environments worsen, KAMA said in a statement.

If the COVID-19 virus affects the automobile industry during the April-July period, KAMA expected sales of carmakers and auto parts makers to plunge 30 percent on-year to 170 trillion won this year.

This photo taken on April 8, 2020, shows vehicles lined up at Hyundai Motor's port at its Ulsan plant, 414 kilometers southeast of Seoul, amid the spreading coronavirus outbreak. (Yonhap)

kyongae.choi@yna.co.kr
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