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South Korea will set up a 500 billion won guarantee fund financed by the government and carmakers to extend more loans to auto parts firms, said Finance Minister Hong Nam-ki on Thursday.
The public sector will also procure 9,500 cars by September to help the auto parts industry, said Hong.
Other measures to support the industry are helping companies win more overseas orders, bringing their plants abroad back to South Korea, and suspending a probe into their imports for one year.
Vice Finance Minister Kim Yong-beom said that the suspension is to ease auto parts firms' burdens due to plummeting exports of cars, which dropped 44.3 percent on-year in April.
From January to April, South Korea's shipped 599,071 cars overseas, down 25.5 percent from the same period last year.
