Trade minister asks automakers to invest in renewable energy-fueled vehicles

South Korea's trade minister on Wednesday called on the local automobile industry to make a big investment in renewable energy-powered vehicles, such as hydrogen and electric cars, as a way to seek a new growth engine for Asia's fourth-largest economy, the trade ministry here said.

"The paradigm of the global car industry is changing rapidly as China has emerged as a leading country in the electric car sector," Trade Minister Joo Hyung-hwan said in a breakfast meeting in Seoul with the heads of five carmakers, including Hyundai Motor Co. and Kia Motors Corp.

"The government is considering expanding tax credits on research and development investment for futuristic vehicles.

The South Korean government earlier unveiled a long-term scheme to transform the country's energy sector into an eco-friendly one and foster the electric and hydrogen car sectors as the country's key export items.

Under the program, the electric vehicle industry is at the top of it, with the country aiming to export an annual 200,000 units of eco-friendly cars by 2020 with a market share of 10 percent.

In order to achieve the goal, the government will help battery companies conduct R&D projects and set up nationwide electric car charging stations, while electric car buyers will get more financial incentives in state subsidies.

Moreover, public super-charging fees at the existing facilities will be cut by half to 60,000 won to fuel demand for the electric automobiles starting next month.

The South Korean car industry has been struggling with contracted demand at home and abroad amid a protracted slowdown of the world economy.

Total output of South Korea-made vehicles fell 6.2 percent on-year for the first seven months of the year, while their exports slumped 13.7 percent over the cited period.

In response, Hyundai Motor, the country's largest carmaker, said it will expand its facilities for hydrogen fuel cells and its sister, Kia Motors, will increase R&D on eco-friendly technologies.

Renault Samsung Motors Co., the local unit of French automaker Renault S.A., also disclosed its plan to introduce the Twizy, a battery-powered two-seat electric city car, to the South Korean market later this year. (Yonhap)