Hyundai Mobis, LG Chem Join Hands

Auto parts maker to set up j.v. to produce car batteries and supplies auto parts to global auto makers

Hyundai MOBIS (www.mobis.co.kr) will join hands with LG Chem (www.lgchem.co.kr) to establish a joint venture company that will be in charge of research and development as well as production of battery packs applied to environment-friendly vehicles. Hyundai MOBIS and LG Chem are domestic leaders in their respective fields, offering global top-notch technologies. It is anticipated that the joining of hands between the two top players will enhance national competitiveness in core future-oriented, environment-friendly vehicle technologies.
On Nov. 2, last year, Hyundai MOBIS announced at the JW Marriott Hotel that it concluded a contract with LG Chem to establish a joint venture that would handle research, development, production, and sales of lithium-ion battery packs for environment-friendly vehicles. The joint venture will be officially launched early this year, and will fully commence mass production of relevant products in the second half of next year after going through a pilot production process.
The joint venture will receive battery cells from LG Chem, use them to produce battery packs for Hyundai and Kia Motors’ vehicles, and supply the battery packs to Hyundai MOBIS. The equity ratio between Hyundai MOBIS and LG Chem is 51:49. The board of directors will consist of a total of six directors, with each company appointing the same number of directors. It is said that one of the directors named by Hyundai MOBIS will serve as the CEO.
The two companies agreed to secure a site within Uiwang Plant in Gyeonggi Province, where Hyundai MOBIS’ core hybrid vehicle parts plant is located, and build a plant with an annual production capacity of 200 thousand units. To this end, the two companies will make investments totaling around 40 billion won by 2013.
Hyundai MOBIS (www.mobis.co.kr), Korea’s largest automotive module and core parts manufacturer, is ramping up speed in global management. In September, the company received an order from the Chrysler Group to supply chassis modules worth 2 billion dollars (around 2.5 trillion won). Hyundai MOBIS has now received orders to supply parts worth around 90 million dollars (around 100 billion won) from finished car companies in Europe and North America.
Hyundai MOBIS recently reached an agreement to supply a rear lamp for a compact vehicle of BMW, a world-leading automotive company, and a drum brake for the Cadillac models of GM. The company commenced a parts supply program that is in line with finished car production.
The rear lamp that will be supplied to BMW is the Rear Combination Lamp (RCL) Assembly. Hyundai MOBS is the first Korean automotive parts supplier to supply a lamp to BMW.
Hyundai MOBIS has drawn up plans to produce two types of models based on halogen and LED application starting from 2011 at Jiangsu MOBIS, a lamp production plant in China; and supply them to BMW’s global production bases in China and the Republic of South Africa, as well as its Munchen and Regensburg plants in Germany for roughly three years.
The brake that will be supplied to GM is the Drum In Hat (DIH), which will be attached to rear wheels to serve as a parking brake. Hyundai MOBIS is supplying a similar part for Kia Motors’ Forte.
A total of 900 thousand units of this part will be produced at the Hyundai MOBIS Changwon Plant for eight years and supplied to GM’s Lansing Plant located in Michigan State. The brake will be applied to Cadillac models.
According to Hyundai MOBIS, top-level executives and working-level officials in charge of procurement and quality at BMW and GM began making visits to Hyundai MOBIS’ research institute and plants in March. They had positive views about Hyundai MOBIS’ quality and production capabilities. It is said that Hyundai MOBIS was chosen after competition with global parts suppliers based on an open bidding process.
Managing Director and General Manager Lee Jun-hyeong of Hyundai MOBIS’ Overseas Business Headquarters says, “The company’s light and brake parts were less known for their technological prowess compared to modules and core parts, but these parts are now garnering a favorable response overseas. We will continually raise the percentage of overseas finished cars that employ Hyundai MOBIS’ core parts, and actively publicize the company’s LED head lamp, which brings together core technologies.”
Celebrating its 32nd anniversary this year, Hyundai MOBIS announced its new vision of becoming one of the ‘world’s top five companies in the automotive parts industry by 2020.’ The company also announced its strategy to increase OEM sales by two-fold from around 12 trillion won this year to 22 trillion won by 2015, and to raise the percentage of core parts sales from among OEM sales from roughly 30% to 50% by 2015. nw

Vice Chmn. Kin Bahn-sok of LG Chem, right, and Vice Chmn. Kim Dong-jin of Hyundai Mobis shake hands after signing an agreement on setting up a plant on joint venture to produce solar battery packs.