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Hyundai Affiliate Ventures Into Electric Car Market

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Hyundai’s Mobis is plunges into the electric car game as suppliers continue to turn to competitors for parts.

Hyundai Mobis (KS:012330) is in speaks with two automakers which are global supply electrified parts, its executive told Reuters, as it hopes to enhance volume and lower prices.

The move is a response that is businesses that are direct as Volkswagen (DE:VOWG_p) and Tesla muscling in with companies with whom Hyundai had worked for many years.

“we was indeed struggling to supply to many other organizations because we were busy with keeping up with Hyundai’s development. Now it has changed,” said Ahn Byung-ki, senior vice president of electric power train company at Hyundai Mobis.

“If we increase outside sales, overall prices will drop. This will gain everyone – us, international companies and Hyundai,” said Ahn, whom previously developed eco-friendly cars at Hyundai Motor.

Hyundai Mobis, in which Hyundai Motor Group chairman Chung Mong-koo is the biggest shareholder that is individual gets more than 90% of its revenue from the mother ship.

Ahn stated reducing car that is electricEV) costs is key to competing with cheaper gas automobiles without subsidies, especially as Chinese rivals undercut Hyundai, and Tesla accelerates the industry’s change to EVs.

He said Mobis hoped to win orders from a few global automakers as early as this year, marking its deal that is first to electrified power trains, although it has supplied other parts of EVs or gasoline automobiles to Fiat-Chrysler yet others.

Hyundai companies can leverage Hyundai’s longtime experience with developing vehicles which can be eco-friendly he said, which puts them ahead of European peers who have focused on diesel.

Hyundai Motor as well as its affiliate Kia Motors ranked third in global battery vehicle that is electric year that is last behind Tesla and Renault-Nissan, according to researcher LMC Automotive.

Hyundai engine Group’s heir and de leader that is facto Euisun Chung, recently said Hyundai is aiming to have more than 10% of EV market that is global in 2025.

Logistics affiliate Hyundai Glovis Co Ltd (KS:086280), which counts Euisun Chung as the shareholder that is biggest, has also expanded customers from Hyundai to Tesla and Volkswagen to maneuver automobiles across continents.

Like plenty of Korea’s family-owned conglomerates, or chaebol, Hyundai Group is deeply committed to vertical integration, with affiliates making parts that are key even metal. Family users, aides and other people near the company founded suppliers that are key.

After years of breakneck growth, nevertheless, Hyundai-Kia’s production volume began trending down in 2016, striking vendors and going them to depend less on Hyundai.

“As growth slowed, Hyundai told vendors to survive on their very own,” said Lee Hang-koo, senior researcher at Korea Institute for Industrial Economics & Trade.

Hyundai provider Hanon Systems (KS:018880), which supplies parts to Tesla Model 3 and Volkswagen’s ID3, generates more than half of its income from non-Hyundai customers.

Myoung Shin Co Ltd, established with a former confidant of Hyundai’s legendary founder Chung Ju-yung planned to manufacture EVs for Chinese startup Byton after acquiring GM’s (N:GM) closed factory in Korea, creating competition that is prospective Hyundai, a client that is key. An affiliate is also providing components that are hot-stamping Tesla for the Model 3’s human body.

But the hit that is pandemic difficult, delaying Myoung Shin’s plan to begin pilot production of Byton’s M-Byte model this year that is present a person familiar with the matter said, speaking on condition of anonymity because of the sensitiveness of the matter. Hyundai’s Mobis is plunges into the electric car game.

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