Local automakers including Hyundai Motor Group and GM Korea have joined hands with the government for guarantee funds to support auto parts makers hit by the COVID-19 pandemic, officials said Thursday.

An agreement to the effect was signed in Seoul by the automakers and the Ministry of Transport, Infrastructure and Energy and the Ministry of SMEs and Startups. 

Transport Minister Sung Yoon-mo said that the fund would “work as a liquidity supporting net for midsized companies with low credit ratings but still have technical skills and capability to deliver auto parts.”

Under the agreement, Hyundai Motor and GM Korea will fund a total of 24 billion won ($20 million), while the government and local authorities will fund 29.5 billion won. 

The funds, which will cover up to 420 billion won for technology guarantee fund and up to 140 billion won for credit guarantee fund, will start receiving applications from the companies at local banks starting June 18, officials said. 

Companies with less than 100 billion won of asset and lower than 1,000 permanent workers will be prioritized for support, while up to around one-fourth to one-third of a company’s annual sales will be supported. 

By Kim Da-sol (ddd@heraldcorp.com)