PJ Tech : Niche Player in Overseas Automotive Parts Markets
- Kim receives the $5 million Export Tower prize from the government

Korea posted a record high of $254.22 billion in exports last year, registering a 2.5-fold surge in nine years after surpassing the $100 billon export mark. The unprecedented feat in the export industry has served as a buttress to prevent the sagging domestic economy from taking a turn for the worse. Despite the remarkable export performance, Korea is experiencing a bittersweet phenomenon - the polarization of the economy - with booming large-size companies and IT-related industries versus underperforming SMEs and conventional industries.
Some SME exporters have fared well by capitalizing on their strong points and strengthening their presence in global niche markets, in sharp contrast to the difficulties facing a majority of ordinary Korean SMEs, mostly depending on domestic demand.
A case in point is PJ Tech Co. Ltd, one of the government prizewinners that were recognized for their contribution to promoting the domestic export industry during a ceremony marking Trade Day late last year. PJ Tech received the $5 million Export Tower from President Roh Moo-hyun.
PJ Tech exported $6.4 million worth automotive parts including filters, gaskets, batteries, and lamps last year. The company broke the $5 million mark last year in nine years after it posted overseas shipments worth over $1 million in 1994.
Kim Yong-gwon, president of PJ Tech, said his company aims at raising its export target of automotive parts produced in Korea, except those made in third countries, to $8 million by diversifying its export markets.
PJ Tech supplies high quality auto parts such as oil/fuel filters, engine gaskets, rubber parts, halogen lamps, and others for Korean, Japanese, European, and American cars.
Established in 1993, PJ Tech has exported automotive parts to such markets as Europe, Middle East, East Asia, and West and South Africa with a slogan of "Competitive Price and Reliable Service". The company has distributed automotive parts produced under outsourcing and processing contracts with 15 Korean companies and three factories in China.
The percentage of automotive parts PJ Tech export under its own brand "AUTOX" accounts for 70 percent and the remainder carries foreign buyers' brands.
PJ Tech President Kim said his company's performance was attributable to the global economy that made a remarked growth in the year 2004, the biggest in the decade. On the other hand, the domestic economy suffered an unprecedented economic sluggishness, coupled with insufficient supply of raw materials and the appreciation of the Korean won. He appreciated his staff and his cooperative companies, saying that he could be presented with the $5 million Export Tower thanks to their strenuous efforts overcoming internal difficulties.
Kim said, "Our company values are the pursuit of building trust, delivering goods in time and supplying even diverse items of small amounts buyers want to buy. My wife and I make visits together as a means of building trust with buyers and their families". PJ Tech is conducting the 2005 CVS campaign, coined with the combining of the initials of credit, variety, and speed. Kim has a firm belief in the company values, saying that they are the only ways with which the company can achieve its goals.
Putting in specific terms major tasks the company wants to implement for the year 2005, the PJ Tech president said his company is seeking to open chain stores selling AUTOX brands in China and install agents in the United States and Canada.
The 2005 business plan calls for a 20 percent raise in existing buyers' sales, and the company is to participate two international exhibitions - one in Europe and the other in the United States.
The Internet is one of the most effective means PJ Tech utilizes to publicize its own brand to global markets. The company conducts publicity activities on major trade portals in Korea and foreign countries. Once a deal is reached with a foreign business concern, Kim said, he visits the new business partner in person regardless of the location and discuss ways to provide support. Kim noted that he puts priority on establishing amicable personal relationships with business partners before getting down to full-fledged business ties. These efforts have paid off much in such countries as Cote d'Ivoire, West Africa, Poland, and Belarus, during 2004.
Kim recalled he endured and overcame hardships and challenges he faced while exploring foreign markets. He almost died from malaria he came down with while participating an exhibition held in an African country. He said he managed to recover from the disease with the help of the chief doctor of his business partner, who unfortunately died of malaria later. Kim said he still remembered the moment he narrowly escaped an armed African armed rebel group's attempt to kidnap him in a hotel. These episodes have served as opportunities to cement ties with his business ties, Kim opined.
The PJ Tech president understands that quality and price are among major factors determining his company's competitive edge. Kim said he puts more energy into focusing on saving cots through mass production and reducing price fluctuations through currency risk management. He said his company also works hard to conduct quality management on a continuous basis by obtaining ISO certificates, saying that once a fault claim is made, his company tries to tackle such issues first the way the buyer wants as much as possible in addition to full compensation. Such policies PJ Tech is adopting are the best one to gain trust from buyers, he confides.
As part of his company's efforts to conduct quality management, he said, his company plans to set aside equivalents to 15 to 20 percent of product costs as R&D outlays into research and development of new moulds.
The domestic auto manufacturing industry is one of Korea's key industries with booming exports, particularly to the United States and Europe, which serves as one of the buttresses to support the sagging national economy. Kim analyzes that the quality of Korean-made cars is on a par with American-made ones, adding that the Korean auto manufacturing sector is still inferior in coating.
As Korean automakers have made a strong showing in foreign markets, supplying parts for the Korean-made cars hitting on the roads around the globe has the potential to expand. Hyundai Motor Co. has entered the U.S. car manufacturing industry by building an auto manufacturing plant in Alabama, and Hyundai's automotive parts makers have followed suit in a bid to make the most of the lucrative automotive parts industry.
Hyundai Motor has gone from strength to strength in the North American market in the recent years following its reentry into the market. The Korean automaker failed in its initial market entry into Canada due to a lack of new models and funding, Kim said. Reflecting a bitter lesion the company learned from its initial botched job, he said, Hyundai is concentrating on designs, depending on the tastes of the clients of each market, including one in the U.S. market where muscular styles are in vogue.
Ponys, the initial model of Hyundai Motor are still running on the South American roads as taxis thanks to a durable engine, produced by Mitsubishi of Japan, even though the model was terminated in Korea a few decades ago. Prides, the initial model of Kia Motors Corp., Hyundai Motor's sister company, are still churned out in the Middle East and China, even though the cars are put on the market carrying a different name in China. PJ Tech is cashing in on the niche market where the demand for the parts of the Korean-made old models is tricking in on top of that on the replicas of genuine parts of Japanese-made cars that turn into big-ticket items in foreign countries.
Kim said Korean automotive parts manufacturers may lose ground in competition with Chinese counterparts due to the comparatively steep appreciation of the Korean won versus the Chinese Yuan. Kim noted that the strong won would erode the price competitive edge of Korean-made automotive parts, even tough currency risks facing PJ Tech in the wake of currency fluctuations are covered by an insurance policy of Korea Export Insurance Corp.
Kim lamented at the circulation of counterfeit AUTOX brands, put on the market in Iran where PJ Tech does not yet have direct business deals, and the copycats, produced in China was initially informed by one of his buyers.
PJ Tech produces automotive parts, including halogen lamps, from his cooperative companies in China, capitalizing on cheaper labor, said Kim, adding that Korean automotive parts makers can ride on the strength of China's economic growth, and PJ Tech is seeking to cash in on China's strong points through joint ventures.
Kim has managed to explore niche markets around the globe for the past 12 years when he has been on the road by expanding a client base through gaining trust from the heart of buyers. He is also enough sociable to serve an international liaison officer of the 21st Century Korea-China Leaders Association in which former VIPs like ex-prime minister Lee Su-sung and Park Se-jik, serve as advisors. nw