Hyundai Mobis sees global carmakers’ orders up 50%

Hyundai Mobis Co., South Korea’s largest auto parts producer, expected orders from global carmakers excluding Hyundai Motor Group affiliates to rise 50% this year, saying its continuous investments in future technology are attracting more and more customers.

Hyundai Mobis, a car parts manufacturer within the conglomerate, said on Tuesday it expected orders from the world carmakers except for the group’s automobile producers -- Hyundai Motor Co. and Kia Corp. -- to increase to some $3.8 billion in 2022.

“We are expected to secure a major carmaker in Europe as a new customer and win orders for next-generation displays, infotainment, safety components and other new products,” it said in a statement.

Hyundai Mobis has been improving competitiveness in automobile electrification technology, investing more than 1 trillion won ($778 million) every year. The company plans to spend 1.3 trillion won on R&D this year after the investment topped the 1 trillion won mark in 2020 for the first time.

THE WORLD’S No. 6 PARTS SUPPLIER

Based on its sales last year, Hyundai Mobis rose to the become the world’s sixth-largest car parts supplier from No. 7 the year previous with total global original equipment manufacturer (OEM) automotive parts revenue of $29.1 billion in 2021, according to information compiled by Automotive News, a renowned auto industry newspaper.

The company had been the seventh-biggest maker on the 100 parts and material companies ranking since 2017.

Global orders, especially ones for electrification and core automobile components, sharply increased last year, Hyundai Mobis said.

Other South Korean parts makers such as Hyundai Transys Inc. and Hyundai Wia Corp. raised their rankings on the list. SK On Co., the world’s fifth-largest electric vehicle battery maker, ranked No. 68, entering the Automotive News list for the first time.

TOUGH ROAD AHEAD

Despite the strong performance, the outlook of global auto parts makers, especially smaller ones, deteriorated, given the global supply chain disruption and surging commodity prices, industry sources said.

“It becomes clear that suppliers are still bearing the brunt of increased material costs and supply-chain shortages since at least last year, even as sales grew,” Automotive News said.

Smaller companies that focus on components for internal combustion engine vehicles are likely to be hit harder as their price bargaining power is weaker than major players and demand for legacy cars is weakening, the sources said.

“The government provides financial support for the development of parts for future vehicles, but many are even struggling to rob Peter to pay Paul,” said a source at a small South Korean auto parts maker.

Write to Hyung-Kyu Kim at khk@hankyung.com
Jongwoo Cheon edited this article.