By Kim Hyun-cheol
Staff Reporter
In the auto industry, parts makers are as important as carmakers. After all, a car is the sum of its parts so good parts lead to good cars.
Hyundai Mobis is behind global leaders like industry leader Denso of Japan, Germany's Bosch and Canada's Magna, but it is in a position to move up the ladder fast, a goal matched by its parent company, Hyundai-Kia Automotive Group, led by Chung Mong-koo, its chairman. Chung is the eldest living son of the late business tycoon, Chung Ju-yung, who founded Korea's No. 1 carmaker, overcame its humble beginnings and put it on track. Mong-koo is now in charge of pushing this carmaker to the top. He started his career with the predecessor of Mobis.
Among the 100 biggest global auto parts makers tallied by Automotive News, a U.S.-based auto magazine, Mobis ranked 27th with $6.1 billion in sales.
It now plays an important role in the Korean automotive business of helping ensure the competitiveness of Korean vehicles, by producing cutting-edge auto modules and supplying various parts for Hyundai and Kia.
Last month saw a remarkable achievement for the company, as its production of core modules in chassis and driving seat's exceeded 30 million units in aggregation, an outcome no other maker in the world has reached.
"Our prowess in technology and production is getting more and more attention from global firms," said Yim Chae-young, Mobis vice president in charge of module business. "We will try our utmost to contribute to better competitiveness in Korean vehicles, as well as gear up for exports."
Mobis is now an emerging global player in the automotive business, overcoming its precarious status when it was faced to choose between a merger and independent survival.
In May 1999, when the business world here was in chaos over a huge financial meltdown sweeping the whole country, Mobis made a bold decision to go for full-blown reconstructure.
The company, then Hyundai Precision & Industry, declared "a second establishment," in which it disposed of most businesses it was running and concentrated on just auto parts.
It started to work on producing chassis modules for vehicles that same year, the first among Korean makers, before taking over the after-sales service division of Hyundai and Kia the next year and changing its name to Mobis.
The "reborn" firm wasted no time in pushing the boundaries of its technology base, simultaneously working on cooperation with overseas companies and self-development projects.
Now, Mobis supplies parts for around 160 Hyundai and Kia vehicle models worldwide. It is running 10 logistics centers and 22 parts supply stations domestically, as well as 18 supply hubs to supply its products to over 10,000 dealerships in 201 countries.
Tuesday saw another important moment for the manufacturer. Its Beijing plant, built in April 2004, broke the 1 million transmissions production mark.
The achievement, made in the relatively short period of 53 months, shows the company's business successfully settled there, also contributing to escalate the competitiveness of its brother firms Hyundai and Kia Motors in China, Mobis says.
It was March 2003 that Mobis established a Chinese unit under a localized parts supply strategy, where plants in China are provided with necessary parts real-time from its affiliate manufacturers.
Setting up the plant was an aggressive measure by its mother firm, Hyundai-Kia Automotive Group. At that time, all transmissions for Chinese-produced vehicles were imported from South Korea. The system, in which automakers had to order products needed for three or four months at a time, limited the fluctuating production plan in China-based plants.
The Mobis plant gives local units of Hyundai and Kia ― Beijing Hyundai Motor and Dongfeng Yueda Kia ― more flexibility in their production plans, so they can change production volume of models according to Chinese customer's preference. This led to a remarkable rise in their sales.
Production in the plant has been on a constant hike. Starting with 52,000 units in 2004, the figure grew to 260,000 units in 2007. This year, it had produced 213,000 transmissions by August.
As major models of Hyundai and Kia became popular there, Mobis built a second China plant in January last year to expand its overall capacity to 400,000 units. To meet the global quality standard, the new manufacturing facility also has a test center containing various high-end equipment and a proving ground.
Currently the plant produces three kinds of transmissions, which are used in 11 models for Hyundai and Kia.
Its latest ambitious item is a new manual gearbox for small sedans, which Mobis plans to supply for strategic models in China, where drivers are much more familiar with manual transmissions thanks to cheaper prices and better fuel efficiency.
Nearly 70 percent of locally manufactured Hyundai and Kia vehicles have hand-operated gearboxes, all of which are produced in the Mobis plants.
As pioneer of the business, Mobis says its future is in the module business.
Modules, semi-assembled kits of automotive parts, is an epochal production system in the automotove business. Front-end modules, for example, include headlights, radiator, engine-cooling-fan systems, the bumper fascia and beam. First introduced in the late 1990s, the business is in intense competition on the global scene.
Mobis, 31 years since its foundation, is on its mark for a new takeoff to become a "global top tier" in the business.
For that goal, the company is spurring expansion of domestic and overseas prouction hubs and exports of core car parts and modules. For development, Mobis aims to focus on high technology, mostly for hybrid and fuel cell vehicles, and "green technology" through small and lighter products and eco-friendly materials.
In recent years, Mobis has made partnerships with foreign leaders like Bosch and Siemens of Germany, acquired local brake and lamp manufacturing companies, and also increased its number of R&D engineers to 700, a six-fold increase from 1999, aiming to boost its capabilities to make state-of-the-art modules for braking, steering, and safety systems.
"Mobis has focused on a growth in quantity so far, and is now aiming to pursue quality growth as well," said Song Sang-hoon, chief researcher at Kyobo Securities.
"Production of core parts and modules in high-end vehicles will contribute to upgrading its status on the global market."