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Auto parts makers

Mando wins $1.2 bn suspension parts order from Volkswagen

By Mar 23, 2021 (Gmt+09:00)

Suspension connects a car to its wheels
Suspension connects a car to its wheels


South Korean auto parts maker Mando Corp. will supply 1.4 trillion won ($1.2 billion) worth of suspension system components to Volkswagen AG over the next 12 years, a deal Mando expects will open the door to the European electric vehicle market.

The German carmaker placed the order for 50 million car suspension products, including shock absorbers and struts, with Mando last week, according to the Korean company's regulatory filing on Mar. 22. It is the single largest order Mando has ever received for suspension parts.

Under the supply contract, Mando will manufacture the suspension system components in Europe and supply them to Volkswagen between June 2022 and March 2033.

Suspension is the system of tires, tire air, springs, shock absorbers, struts and linkages that connects a vehicle to its wheels. They support the vehicle weight and absorb road shocks caused by bumps, the key to determining ride comfort and driving safety. For self-driving cars, suspension systems are expected to play a key role in a smoother ride.

Mando's suspension systems will be installed on Volkswagen's next-generation key models based on the modular electric drive matrix (MEB), a technology platform developed specifically for EVs. They will also be used for best-selling cars with combustion engines from both Volkswagen and Audi, including the Golf, Tiguan, Passat and Caddy models.

"Now that we have become Volkswagen Group's strategic partner, we will seek to cooperate on other chassis products," said Mando's President Cho Sung-hyun.

The Korean automotive company is also looking to leverage the latest order to secure new deals from Volkswagen's operations in China.

Mando has been churning out suspension products in Beijing since 2002. It also runs a production line in Ningbo, China. Last year, Mando produced 14 million suspension products in China, enough supply for 3.5 million vehicles.

Volkswagen has rolled out its all-electric models the ID.3 and the ID.4, with a goal to sell 26 million EVs by 2029. Last week, the world's second-largest automaker announced plans to build six battery cell plants in Europe by 2030 to make EV batteries in-house, sending shockwaves throughout the Korean battery maker industry.

Write to Il-Gue Kim at black0419@hankyung.com

Yeonhee Kim edited this article.

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