Hyundai Mobis, the auto components maker affiliated with the Hyundai Kia Automotive Group, plans to expand its current network of 18 overseas logistics centres supplying spare parts.

The existing network is focused on markets with a large Hyundai and Kia presence such as China, Europe and the United States but that is set to change.

Hyundai Mobis has gradually increased its logistics capacity in China in line with the two carmakers’ expanded market presence and production capacity in China and now has three centres for supplying parts to different regions of the country, the Korea Herald reported.

It established its first replacement parts distribution centre in China in 2002 in Shanghai. This centre also selects and supplies parts produced by Chinese firms to Hyundai and Kia vehicle plants overseas.

The second Chinese logistics center, Beijing Mobis Parts, was established in 2004 in collaboration with a Chinese partner to oversee the distribution of service parts for vehicles produced by production joint venture Beijing Hyundai Motor.

The third logistics centre in China is located near Dongfeng Yueda Kia Motor, also a production joint venture in Yenching, Jiangsu province.

“The three logistics centres’ stocks are managed together and we plan to establish a ‘total logistics network’ to increase the efficiency of the operations,” a Hyundai Mobis official told the paper.

“As part of the plans, we plan to apply the system to logistics centres that will be set up in inland provinces where the number of automobiles is expected to grow exponentially.”

In addition to expanding its logistics and production network in China, Hyundai Mobis is also looking to establish its auto parts retail business Mobis Carfe. The South Korean chain was first established in 2003 and there are now over 180 outlets.

The first overseas Mobis Carfe was opened in Shanghai in 2007 and the company aims to have 170 locations in China by 2012.

In Europe, Hyundai Mobis’ parts distribution operation is overseen by Mobis Parts Europe in Belgium. MPE has storage facilities in the United Kingdom, Germany and Sweden, allowing it to efficiently coordinate delivery of parts to all areas of Europe.

Hyundai Mobis’ American logistics operations are divided between centres in Alabama and Miami. Alabama is responsible for North American markets while Miami oversees Caribbean and South American distribution.

In 2007, Hyundai Mobis established a logistics centre in Chennai, India.

However, the company’s drive to expand its global logistics network is not focused exclusively on regions with large automotive markets or countries that have Hyundai or Kia plants – it recently opened a logistics centre in Alexandria, Egypt, the first in Africa.

“Hyundai Mobis is the first Korean company to operate a logistics centre in Africa and Alexandria will be responsible for delivering parts to Hyundai and Kia dealers to nine countries in northern Africa,” a Hyundai Mobis official told the Korea Herald. “It supplies parts to African nations directly from an African country.”

In addition to expanding the network, Hyundai Mobis last year introduced a ‘direct delivery’ system, which ships parts directly to dealers, at both its Korean and overseas logistics branches. The new system allows the company to deliver orders locally within four hours and overseas in two days.

The system also allowed it to reduce related costs by KRW50bn last year and it expects savings of KRW200bn won in the next three years, Hyundai Mobis said.

The company also aims to raise its first-pick rate – the ratio of parts it can supply immediately – to 98% from 96% now.