Hyundai Transys supplies transmissions to Volkswagen

Hyundai Transys Inc., an auto parts affiliate of Hyundai Motor Group, has started providing transmissions to Volkswagen AG, industry sources said on Monday.

It is the South Korean car parts maker’s first transmission supply deal with the German automaker. Further details on the agreement were not disclosed.  

Transmissions are among Hyundai Transys’ core products, alongside axles and seats. As a transmission changes gears, the vehicle's engine can be operated at the most efficient rate of revolutions per minute (RPM) and fuel consumption can be reduced.

Hyundai Transys is increasing global sales under the group’s aim to diversify its business portfolio. In December 2022, the car parts maker won a 700 billion won ($541.6 million) deal to supply transmissions to Dutch auto giant Stellantis N.V.

RELIANCE ON AFFILIATES

Hyundai Transys’ powertrain, an assembly of components like transmissions, engines and axles, makes up 65% of the company’s revenue. The remaining 35% comes from seat sales.

Some 90% of the firm’s sales are from the group affiliates like Hyundai Motor Co. and Kia Corp.

Hyundai Transys is planning to reduce its heavy dependence on affiliates and expand in global markets, promoting its lineup that applies to all types of vehicles, including hybrid and electric cars.

OVERSEAS SALES UP

Hyundai Motor Group affiliates are pushing their global sales under Chairman Chung Euisun, who took office in October 2020. 

Car parts maker Hyundai Mobis Co. won a deal valued at around 5 trillion won to supply battery system assembly (BSA) to Volkswagen Group in August of this year. The products will be used for the German auto behemoth’s next-generation platform for electric vehicles.

Hyundai Mobis is also supplying chassis modules to Mercedes-Benz AG, BMW AG and Stellantis. The Korean firm’s global orders through the third quarter amounted to $8.6 billion, exceeding the annual target of $5.4 billion by 59%.  

Hyundai KEFICO Corp., an automotive electronic management system affiliate, entered into an agreement with Ceer Motor in July, a joint venture between the Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund, and Taiwanese tech firm Foxconn. The deal was valued at 250 billion won.

Write to Sungsu Bae at baebae@hankyung.com


Jihyun Kim edited this article.