Hyundai Mobis, South Korea’s biggest provider of automotive parts, has bought a brake and steering system maker in China, aiming to reach an annual production of 1 million units by 2007.
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The Korea Herald said the company plans to grow the corporation in southeastern China, formerly owned by Korean auto parts manufacturer Seohan Industries Co., into a supplier of key components for chassis module plants worldwide.
Hyundai Motor Group’s parts making arm, which has recently signed a 200 billion won contract to supply brake systems to its affiliated car makers, reportedly said it will expand the site of its new firm in Jiangsu to increase the production volume of brakes 10-fold by 2007.
The Korea Herald said the newly purchased firm, named Wuxi Mobis Co. Ltd., will also increase production of steering pumps five-fold to a million units and will operate a new production line that churns out a million steering systems per year, according to Hyundai Mobis.
As a result of bigger production, the company expects sales of Wuxi Mobis to soar from the current 3 billion won to 300 billion won by 2007.
The products currently supplied to Beijing Hyundai Motor Co. and Dongfeng Yueda Kia Co., Chinese arms of affiliated automakers Hyundai Motor Co. and Kia Motors Corp., will also be sold to their Indian and Slovakian plants as well as other global carmakers, Mobis said, according to the report.
In order to pass the global quality tests, a proving ground will also be built in the premises of Wuxi Mobis Co.
The Korea Herald noted that Hyundai Mobis recently announced that it will spend 51 billion won in building a proving ground for testing chassis modules in Seosan, South Chungcheong Province, to boost the brake system business after it agreed to sell brakes for five new cars of Hyundai and Kia.
The company plans to reach 1 trillion won in annual sales of brake systems by 2010 via larges investments and aggressive promotion targeting global carmakers, the report added.
