Hyundai Mobis expands in China

SEOUL — Hyundai Mobis is building two plants in China to build parts modules for Hyundai-Kia Automotive Group.

Jiangsu Mobis Automotive Parts Co., a Mobis-owned company in Yancheng City in Jiangsu province, will finish a plant by the end of this year. The addition will add 300,000 units a year to the location’s existing capacity of 130,000. 

Meanwhile, Beijing Hyundai Mobis Automotive Parts Co., another Mobis company, will finish a second module plant next year that would double the current 300,000-unit capacity.

Both new plants will produce chassis and front-end modules and carpeting for vehicles produced outside Korea, as well as interior modules and other components to be shipped to Korea, said Jung Soo Kyung, general manager of business planning at Mobis headquarters in Seoul. The Beijing plant will also manufacture bumpers.

The Jiangsu plant supplies parts to Kia’s Pride, Cerato, Optima and Carnival models. The Beijing plant supplies Hyundai’s Sonata, Tucson, Avante and Verna models.

In China, Mobis has six plants that make parts for light vehicles and one plant for commercial-vehicle parts.

Mobis’ 2006 revenue of 67.39 billion yuan ($8.78 billion) grew 8 percent from 2005, but net profits fell 13 percent to 5.66 billion yuan ($738 million). Its module and parts sales to automakers have struggled, while its service parts business has grown.

Hyundai and Kia make up 35 percent of Mobis’ total business, Jung said.

Mobis also has a deal to supply safety and steering systems for Nanjing Automobile Group’s MG line of vehicles.

Starting in July, Mobis will be adding parts for Nanjing to its production lines at Wuxi Mobis Automotive Parts Co. in Wuxi, Jiangsu province, and at Shanghai Hyundai Mobis Automotive Parts Co. Production of steering systems is scheduled to begin in July, followed by safety and steering system components after October, Jung said.

The Wuxi plant also exports brake parts, power-steering pumps and steering columns to Slovakia, where Kia Motors Corp. is building the Cee’d hatchback, Jung said. 

Despite all the expansion, Jung said Mobis is taking a careful approach in China because overcapacity is squeezing the industry.

He said: “Who’s going to be the winner? Who’s going to survive? Nobody knows.”

June 13, 2007 | Automotive News China (now defunct)