Hyundai Mobis Co., Korea's largest auto parts supplier, announced it acquired a controlling stake in Korea Automotive Systems Co. (KASCO).
Mobis purchased 38.3 percent or 1.84 million shares of Kasco, the maker of brakes and power steering oil pumps. Mobis acquired from Korea Flange Co (KOFCO).
Hyundai Mobis, producer of modules or functional sets of individual components, aims to become one of the world's top ten auto parts makers by 2010. The company wants to double its sales to $15 billion. It plans to do so by investing $1 billion in developing new technologies. Mobis is part of the Hyundai Motor Group, which has set a similar deadline for becoming the world's No. 6 automaker.
Commanding a quarter of the domestic brake system market, Kasco saw sales of $255 million and net profit of 19.8 billion won last year.
"As Kasco's brake system is the most important part of our chassis module, we plan to increase Kasco's annual production capacity of 1.5 million brake systems to over 2.5 million units by investing 300 billion won until 2008," said Mobis Chairman Park Jeong-in at a news conference yesterday.
Interestingly, Kasco was a former Kia affiliate once called Kia Precision Works that was bought and renamed by Korea Flange Co. in 1999. Korea Flange is a former Hyundai Group company first run by Hyundai founder Chung Ju Yung and his brother-in-law Kim, Yung Ju. Today, Korea Flange (KOFCO) is headed by Kim, Yung Chae, Kim, Yung Ju's son.
Likewise, Hyundai Auto Group head Chung Mong Koo, is the late Chung Ju Yung's son. Adding to the dynamics of the acquisition, Chung Mong Koo's son Chung Eui Sun was recently appointed president of Mobis and Kia Motors
As for Kasco, the takeover will mean an increase its in its sales to Hyundai Motor and Kia Motors. About a quarter of Kasco's sales currently go to Kia.
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