Three of Korea’s top auto parts companies, Hyundai Mobis, Hanon Systems, and HL Mando, have achieved record overseas sales in the first nine months of the year (January-September), particularly in the United States and Europe. The total amount of overseas sales generated by these companies is approximately 36.6 trillion won, and this figure is expected to reach 50 trillion won by the end of the year. These three companies have exceeded Suzuki’s annual sales (about 42 trillion won), and are closely followed by the Renault Group (about 61 trillion won).
The rapid growth can be attributed to the strong performance of key partners Hyundai and Kia, who ranked third globally last year and again this year. It is also believed that the quality of the products of these three companies has improved significantly compared to the past. Many global automakers, such as Volkswagen, General Motors, Rolls-Royce, and Porsche, are increasingly using Korean components, including electric vehicles, in their flagship vehicles.
Over the past fifty years, the Korean automotive industry has been trying to catch up with companies from Germany, Japan, and the United States. While car manufacturers Hyundai and Kia have faced difficulties, things have been even tougher for parts companies. However, with the rise of the “future car era” and the increasing popularity of electric vehicles, the situation is changing. The three Korean companies, as well as Hyundai and Kia, have been developing their technology for future vehicle parts over the last decade, and the world is finally taking notice.
Hyundai Mobis has secured supply contracts worth 8.572 billion U.S. dollars (about 11.268 trillion won) from overseas automakers other than Hyundai and Kia this year. The company’s annual overseas orders have tripled in two years from about 2.5 billion U.S. dollars in 2021. In the second half of this year, the company wontwo significant contracts. The first one is to supply electric vehicle battery systems worth around 5 trillion won to Volkswagen, while the second one is to supply next-generation electric vehicle chassis modules to Benz.
HL Mando, the flagship affiliate of HL Group (formerly Halla Group), is on the verge of surpassing 5 trillion won in overseas sales for the second consecutive year. Last year, HL Klemove received orders worth 2.9 trillion won, of which 65% or 1.9 trillion won came from overseas. HL Klemove, HL Mando’s subsidiary specializing in autonomous driving, supplies cameras and radars based on more than 2,000 autonomous driving-related patents to the US electric car company Rivian.
The auto electrical components market, which is expected to play a core role in future vehicles, is projected to grow to 32.3 billion U.S. dollars (about 424.4 trillion won) by 2028, according to Strategy Analytics.
Leading Korean companies, such as Samsung and LG, are contributing to the market expansion as well. LG Electronics is expected to achieve sales of over 10 trillion won in auto electrical components for the first time this year. Their primary products are infotainment systems and electric vehicle motors, which they mainly supply to General Motors (GM). Samsung Electronics is also developing high-performance automotive semiconductors, which are in demand from global automakers.
This article was originally published on Dec. 11, 2023.
