Cepsa Auto Team

Chung Mong-kooAs Hyundai Motor and Kia Motors aim to become the worlds third-largest automaker this year by targeting overseas markets, the conglomerate is also bringing its suppliers along for the ride, highlighting the automotive giants shared-growth efforts.

Chung Mong-koo, chairman of Hyundai Motor Group, has been said to be closely overseeing the two sister automakers overseas business this year, encouraging the company to assist its auto component suppliers in expanding overseas as well.

At meetings with company executives, Chung has instructed them to help their major suppliers secure more overseas orders.

When the automotive group opened its first overseas factories in 2000, it restricted its suppliers from doing business with other car makers. But that has changed, with Chung placing greater emphasis on the governments initiative to promote shared growth between the countrys conglomerates and their small and midsize partners in both domestic and international business.

As of this year, a total of 439 suppliers have gone overseas with Hyundai and Kia, with the total volume of components manufactured by suppliers jumping from 3.2 trillion won ($2.9 billion) in 2009 to 5 trillion won this year. Average sales of suppliers also more than doubled, to 174.7 billion won last year from 73.3 billion won in 2001.

In particular, sales for NVH Korea, which makes interior materials for Hyundai and Kia, rose from 26.8 billion won in 2001 to 265 billion won in 2010. Hyundam Industry Co., a fuel pump manufacturer, has seen its sales jump from 29.1 billion won to 160.5 billion won over the same period.

Comparing 2001 to 2010, the countrys gross domestic product as well as Hyundai and Kias sales increased only 1.8 times, said a Hyundai Motor official. The number of suppliers with sales of more than 100 billion won doubled to 68 over the same period.

Hyundai Motor Group has also been holding overseas road shows for its suppliers since 2002. Through such venues, Dong Yang Piston secured orders worth $760 million from major automakers including Chrysler. The number of Hyundai and Kia suppliers that have signed contracts with foreign automakers has also increased from seven in 2002 to 165 in 2010. Suppliers exports amounted to 8.7 trillion won from 3.3 trillion won over the same period.

The automotive group said it aims to grow its suppliers export volume to 21 trillion won per year by 2015.

By Kim Tae-jin, Lee Eun-joo [angie@joongang.co.kr]