2011.05.3005:39:00UTC+00Japan To Set Up JPY 50 Bln Fund For Auto-Parts Industry

The Development Bank of Japan plans to create a fund in June for auto parts manufacturers, whose operations were hurt by the massive earthquake and tsunami in March, reports said Monday citing sources.

The 50-billion yen fund will be utilized to invest in companies involved in the auto supply chain. The intention is to inject money into the small and medium-sized manufacturers, which will ultimately support the overall recovery of the economy. The earthquake has disrupted the global auto supply chain.

The Development Bank of Japan has yet to make an official announcement. Initially, the size of the fund will be 5 billion yen, the Financial Times reported citing an unidentified person familiar with the plan.

In April, auto sales had declined at a record pace, according to a report published in May by the Japan Automobile Dealers Association. Sales were down 51 percent year-on-year.