Hyundai Motor Group said on Monday that it would offer 55.7 billion won ($46.26 million) worth of financial aid to its sales and parts dealers, supporting the stabilization of their operations amid the COVID-19 pandemic.
The conglomerate said that the subsidies would support dealerships of Hyundai Motor, Kia Motors, and Hyundai Mobis. The group expects the financial aid to help its affiliates overcome the economic slump caused by the COVID-19 pandemic.
Hyundai said that around 760 Hyundai Motor and Kia Motors dealerships and about 1,100 Hyundai Mobis’ auto parts dealers across South Korea would receive the aid.
The company said that it raised 70 percent more from the 32.7 billion won ($27.25 million) it raised last year for the same purpose.
Financial Aid Composition
The financial aid would comprise around 40 billion won ($33.3 million) in the form of mutual growth funds helping the affiliates pay off loan interests, focus on running their business, and maintain fiscal balance.
Additionally, around 12.1 billion won ($10.1 million) would go to direct aid for paying rent fees and secure liquidity. Hyundai would inject the remaining 3.6 billion won ($3 million) for renovating old facilities.
Since 2016, Hyundai Mobis has been running a 20 billion won ($16.67 million) mutual growth fund. According to the group, Hyundai Motor and Kia Motors would each commit 10 billion ($8.33 million) into the fund, saying that it could increase the total funds if needed.
Hyundai Motor Group said that it would also consult with dealers’ associations for fair trade with them. The consultation aims to introduce a standard contract between the group and the dealers.
Vehicle sales of Hyundai motor and Kia Motors fell 22 percent year-on-year after suffering a slowdown from the coronavirus outbreak. The growing trend of contactless shopping has also affected the sales of the dealers.
A company official said that the plan aims to offer practical help to dealerships that faced the impact of the economic slowdown. The official added that the group would coexist with dealers to overcome the current slump and prepare for post-COVID-19 industrial changes.