Korean Automobile Parts Makers Enjoyed Robust Growth
Korean automobile parts makers have enjoyed robust growth in recent years driven by growing sales of Korean cars in the global market.
Export-driven industries now may cut their profits coming from overseas sales, but the prospect for their further advance is very bright as long as the car industry keeps its form.
Carmakers and parts makers are in the same situation. If carmakers go global to develop untapped markets, parts makers follow in their footsteps to harness their business network. If auto sales are slow, parts makers are in trouble.
Car parts manufacturers provide crucial items, such as modules, engines, braking systems and scores of convenience devices for automakers. Korean parts makers need to make technological improvements in some areas but for the most part they are on par with top global firms.
The industry, led by Hyundai Mobis, Mando, and Halla Climate Control, is now enjoying its heyday as Korean cars make fast progress in overseas markets, including the United States.
Auto experts say that the success resulted from research and development efforts in the heat of the Asian financial crisis in the late 1990s.
``The car industry bounced back strongly with enhanced quality and cost effectiveness after overcoming a severe restructuring process during the financial crisis,’’ said Noh Young-wook, president of the Korea Automobile Technology Institute, which develops car-related technologies.
``In the process, Korean component suppliers have enhanced their technologies. The dearth of sufficient basic technology, research and development engineers and equipment and test facilities had hampered the industry, but things have changed.’’
As the car industry grew, the Korean auto parts industry increased its turnover from 23.9 trillion won in 2001 to 27.39 trillion won in 2002, 32.04 trillion won in 2003 and 36.5 trillion won in 2004, according to the Korea Auto Industries Cooperative Association, the lobby group for car parts manufacturers.
Hyundai Mobis, the largest auto parts maker who supplies Hyundai Motor and Kia Motors, the top two Korean car manufacturers, chalked up 696 billion won in net profits and 751.8 billion won in operating profits last year. Its annual sales were 6.4 trillion won, up 21 percent from the previous year.
Export-driven industries now may cut their profits coming from overseas sales, but the prospect for their further advance is very bright as long as the car industry keeps its form.
Carmakers and parts makers are in the same situation. If carmakers go global to develop untapped markets, parts makers follow in their footsteps to harness their business network. If auto sales are slow, parts makers are in trouble.
Car parts manufacturers provide crucial items, such as modules, engines, braking systems and scores of convenience devices for automakers. Korean parts makers need to make technological improvements in some areas but for the most part they are on par with top global firms.
The industry, led by Hyundai Mobis, Mando, and Halla Climate Control, is now enjoying its heyday as Korean cars make fast progress in overseas markets, including the United States.
Auto experts say that the success resulted from research and development efforts in the heat of the Asian financial crisis in the late 1990s.
``The car industry bounced back strongly with enhanced quality and cost effectiveness after overcoming a severe restructuring process during the financial crisis,’’ said Noh Young-wook, president of the Korea Automobile Technology Institute, which develops car-related technologies.
``In the process, Korean component suppliers have enhanced their technologies. The dearth of sufficient basic technology, research and development engineers and equipment and test facilities had hampered the industry, but things have changed.’’
As the car industry grew, the Korean auto parts industry increased its turnover from 23.9 trillion won in 2001 to 27.39 trillion won in 2002, 32.04 trillion won in 2003 and 36.5 trillion won in 2004, according to the Korea Auto Industries Cooperative Association, the lobby group for car parts manufacturers.
Hyundai Mobis, the largest auto parts maker who supplies Hyundai Motor and Kia Motors, the top two Korean car manufacturers, chalked up 696 billion won in net profits and 751.8 billion won in operating profits last year. Its annual sales were 6.4 trillion won, up 21 percent from the previous year.
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