Hyundai Mobis permitted to build factory near Seoul

By Kim Tae-gyu

Hyundai Mobis, the nation’s largest auto-parts manufacturer, will be allowed to expand its facilities in Hwaseong, Gyeonggi Province, to meet the rising demand for chassis modules from its mother firm Hyundai Motor.

The Ministry of Knowledge Economy (MKE) said Friday that it decided to adjust the industries permitted to enlarge their capacity in Seoul and its vicinity from the current 158 to 142.

A total of 25 items were excluded, such as fiber-optic cables but nine were added like chassis modules, bio-similars, cellular phone components and ultra pure nitrogen gas.

As a result, Hyundai Mobis will be able to increase the chassis module capacity at its Hwaseong factory. The Seoul-based outfit has sought to increase capacity before, as Hyundai Motor’s sales have jumped over the past few years, but could not due to previous regulations.

Praxair Korea is also projected to win approval to increase its capacity for its industrial gas plants in Yongin, Gyeonggi Province.

Against general expectations, automobile safety glass was not added to the list, which is bad news for KCC. The chemical firm has wanted to increase capacity at its Yeoju factories, around 100 kilometers southeast of Seoul.

``We have reshuffled the product list in the high-tech industries so that makers of emerging products can enlarge their facilities in Seoul and the surrounding Gyeonggi Province,’’ an MKE official said.

``But they cannot relocate their head offices in regional cities to Seoul or around the capital. They cannot establish new production facilities there, either.’’

Market watchers say the step is great for Hyundai Mobis.

``The chassis module is one of the most significant skeletal parts of a car. Subsequently, Hyundai Mobis has asked the Seoul administration to allow the idea of increasing production near Seoul close to where the demand is,’’ professor Kim Pil-soo at Daelim College said.

``The new government decision will definitely raise the corporate value of Hyundai Mobis as well as that of Hyundai Motor as logistics costs will go down substantially.’’

Hyundai Motor has automobile assembly lines in Asan close to Hwaseong. Its sister company Kia Motors also runs lines in Gwangmyeong, Gyeonggi Province.