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South Korea’s major auto parts makers are pushing ahead with their global growth-oriented paces of expanding overseas businesses.
Hyundai Mobis, the largest auto parts maker in the nation, has unveiled its plan to increase its supply volume to the so- called ‘Big 3’ automakers in the U.S.A by up to 40 percent by 2015. According to an official source, Hyundai Mobis is already supplying more than 70 percent of its products to Hyundai Motors and Kia Motors plants located in North America. The large enterprise, however, intends to increase transactions with U.S.A local automakers such as Chrysler and General Motors (GM), curtailing its dependence on its parent company.
An official from the company was quoted as saying “Hyundai Mobis, the 12th largest auto part company by sales in 2009, aims to enter the top 10 rankings in the short term and become the fifth largest auto parts maker in a decade.” The key to achieving this goal is to increase overseas sales. ‘Mobis America,’ the company’s local branch located in the U.S.A, posted US$3.2 billion in sales last year, accounting for 16 percent of the company’s entire sales.
Last year, Mobis America supplied $2 billion worth of modules to Chrysler and signed a US$260 million contract to supply Integrated Center Stacks (ICS) to GM. Currently, Mobis’ module and parts business with Hyundai and Kia Motors accounts for more than 85 percent of the company’s total sales. The company plans to significantly increase the proportion of sales associated with foreign automakers by more than 25 percent this year, reducing its dependence on Hyundai and Kia to 70 percent.
Another leading Korean auto parts maker, Mando Corp., has recently received an order to supply caliper brake systems worth US$193 million to German company Volkswagen AG. The supply will reportedly begin in 2015 for cars to be produced from the carmaker’s plants in Europe and China. Hyundai Automotive Group, a leading global carmaker, represents 56 percent of Mando’s supply, followed by GM 22.0%), China (2.3%) and Europe and other areas (19.9%). Mando plans to build a production center by 2013 near the region of Katowice in the south-west of Poland as it expects to win more orders from other European car makers.
The new production plant is expected to supply brakes, suspension and steering units to Hyundai, Kia, BMW, Renault and Peugeot Citroen. Among its production list, brake systems accounted for more than 40 percent of the company’s sales last year. Hyundai Wia, a major auto part and machine tool provider, also is reportedly planning to build three more plants in China by the end of the year, enhancing its China strategy.
A chief executive officer of the company was quoted as saying “Hyundai Wia is going to expand production facilities within the mainland China and reinforce the local marketing organization including sales and service workforce in order to achieve US$1.48 billion in sales in China this year.”
Hyundai Wia is currently operating three production facilities including the engine, metallic pattern and material plants in Rizhao, a port city in Shandong Province, China. If the new plants are completed by the end of the year, the company is expected to secure a total of nine production bases in the nation alone. All the products manufactured there will be supplied to leading Korean global carmakers’ plants in China and other automotive or auto parts companies in Russia, India and the U.S.A.
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