Hyundai Corporation is set to establish a joint venture (JV) in Indonesia with a Japanese auto parts manufacturer. The project results from Hyundai Corporation’s plan to expand its business to include automotive parts manufacturing and the Japanese automobile industry’s endeavors to reduce its supply chain in China amid a strategic rivalry between the US and China.
According to a trading industry source, Hyundai Corporation has recently built Sugihara Hyundai Automotive together with Sugihara, Japanese automotive interior materials manufacturer. The JV whose ownership is equally (50:50) shared by the two companies plans to set up a plant near Jakarta, Indonesia, to manufacture auto parts including trunk boards for 500,000 vehicles every year. The plant is expected to start test operations in the first half of this year and to initiate mass-production next year./p>
Hyundai Corporation Group Chairman Chung Mong-Hyuck is entering the home of the late Hyundai Group founder Chung Ju-Yung in Cheongun-dong, Jongno-gu, Seoul, where a ceremony to commemorate the 22nd anniversary of the late Honorary Chairman’s death is held.
Components produced by Sugihara Hyundai Automotive are scheduled to be supplied to Japanese automobile manufacturers. The JV also hopes to supply auto parts to Hyundai Motor Company that has aggressively expanded its business in Indonesia. According to an industry source, the Japanese auto industry has diversified its auto parts supply chain to include Indonesia and other nations due to supply chain issues in China stemming from the US-China strategic competition, leading to the JV.
Auto parts account for about 20% of the entire operating income for Hyundai Corporation led by Chairman Chung Mong-Hyuck, a nephew of the late Hyundai Group founder Chung Ju-Yung. KRW 13.6 billion out of its operating income of KRW 66.8 billion generated last year came from this sector.
Hyundai Corporation has made diverse efforts to expand its auto parts manufacturing business. In particular, against the backdrop of global networks for the auto industry getting further diversified, it has done its utmost to expand tripartite trade using manufacturing facilities in a third nation and to advance into related industries, rather than simply exporting components made in Korea.
Hyundai Corporation established a JV in Kaliningrad, Russia, with a Korean auto parts manufacturer, last year and started constructing a local plastic injection molding and painting plant for auto components but has since experienced business difficulties due to the Russia-Ukraine War. It was also chosen as a priority negotiating partner for acquiring Shinki Intermobile, a first-tier supplier for Hyundai Motor Group and auto plastic components manufacturer. However, it scrapped its plan to acquire the company in the due diligence process.
March 24, 2023, Chosunbiz