South Korea will set up a fund of 300 billion won ($248.6 million) to provide more liquidity to automobile subcontractors that have been hit by the coronavirus pandemic, a top financial regulator said Monday.

Financial Services Commission Chairman Eun Sung-soo said the fund will be jointly set up with carmakers, including Hyundai Motor Co.

Hyundai Motor plans to chip in 10 billion won to the fund, and the government has been in talks with other carmakers, Eun said.

The fund will provide guarantees for loans for the subcontractors, Eun said. 

The pandemic has disrupted trade and halted production around the globe, with a rising number of countries fully shutting their borders.

Auto exports more than halved in May from a year earlier due to falling demand in the face of the pandemic.

Local carmakers shipped 95,400 units of cars overseas last month, down 57.6 percent from a year earlier. In terms of value, auto exports also fell 54.1 percent over the period to reach $1.81 billion.

South Korea has pledged stimulus packages worth 270 trillion won to cushion the economic blow from the pandemic. (Yonhap)