Canadian automotive parts supplier Magna International plans to expand its production plants in South Korea to tap the growing Northeast Asian market.
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“We are planning a large investment in powertrain, interior and seating businesses in Korea as we expect a strong growth of the Asian auto market,” Magna president Mark Hogan told the Korea Herald.
Hogan noted that by 2010, carmakers will outsource 70% of auto content to suppliers, and electronics will take up 70% of a vehicle’s total material cost.
Magna International supplies instrument panels for GM Daewoo Auto & Technology Co.’s new sport-utility vehicle.
The Korea Herald said the company opened a local sales and engineering office in 1999 and operates plants in Cheonan and Asan, South Chungcheong Province, that manufacture oil pumps for transmission and engine front modules. Magna supplies all five Korean carmakers and its sales there more than doubled since to $US68.5m last year.
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By GlobalDataThe company expects its Korean sales to quadruple by 2010.
Magna, which acquired the car top system business of Germany’s Porsche, held a tech show at Hyundai-Kia’s research centre this week.
“We hope to receive open top system orders from Hyundai in the future,” Hogan reportedly said.
Hyundai Motor plans to launch its first convertible in 2008, the Korea Herald noted.
The report said Magna appointed former Hyundai Motor executive Kim Hong-su as the chief executive of its Korean operation early this month. “We plan to supply seats to Hyundai-Kia’s overseas plants,” Kim told the paper.
The report noted that, unlike bankrupt Delphi, the Canadian manufacturer of automotive systems, modules and components is non-unionised. Hogan told the paper Magna’s labour costs account for less than 10% of its total material costs.
