Hyundai ups part production

04 April 2005
Immediate release

Hyundai ups part production

Hyundai is dramatically increasing its production of parts for its own vehicles and others.

The South Korean giant’s specialised parts company, Mobis, is tripling its research staff over the next five years to a total of 1,700 people. And it will plough 100 billion won ($NZ140 million) into research and development this year alone.

Modules are the key driver of the company's growth and are expected to be used more widely in auto manufacturing in the future. A module is a packaged functional assembly of components for use with other such assemblies.

Having begun mass-production of modules in 1999, Hyundai Mobis assembles about 20,000 units - including its own and those provided by other suppliers - into modules that are placed in different parts of the car such as chassis module, complete chassis module, cockpit module and front end module.

By using modules, carmakers can avoid defects resulting from assembling thousands of small parts. A module provider guarantees the quality of all parts used in the module, lessening trouble for the car assemblers.

A module provider shares the automakers' job of designing, manufacturing, assembling, testing and selling the products, thus saving time and money. This eventually leads to greater competence of carmakers or enhanced quality at a lower cost. It also allows parts suppliers to focus more on the different areas they specialise in.

Customer options on a new car are sent to the Mobis module plant as a list of code numbers for the necessary parts. As a bar code reader scans the module on a conveyor belt, lamps on containers of the required parts are turned on in sequence so workers know which parts to assemble when.

After designing and producing the modules, Hyundai Mobis supplies them "just in sequence" - a delivery term even more advanced than Toyota's "just in time" - to the nearby auto assembly line which is just five minutes away from the Mobis plant.

"On average, Hyundai's modules enable 35 percent reduction in number of components, 20 percent cut in weight and saves a lot of cost," said Jung Soo-kyung, deputy general manager of business planning.

Seven Mobis factories in South Korea can produce 2.4 million chassis modules, 1.8 million cockpit modules and 600,000 front end modules per year.

Mobis' production facilities in China make 450,000 units annually. The company's Alabama module plant, next to a Hyundai Motor assembly line, is scheduled to begin production this year, while its Slovakian plant is slated for 2006.

Mobis also plans to build a module plant in India by June 2007.

A chassis module comprises around 100 parts that form the platform for the body and engine of the car. It mainly consists of the axle, the suspension and sub-frame.

When complete, such a module is the integration of 350 parts including the engine, transmission, steering and suspension systems attached to a chassis frame. This module accounts for 40 percent of the assembled car's price and, when fitted with wheels, can run if it is fueled.

In August last year, Hyundai Mobis signed a 180 billion won contract with DaimlerChrysler AG to supply complete chassis modules for the automaker's sport utility vehicles.

The modules will be manufactured by Mobis at DaimlerChrysler's production base in Toledo, Ohio, starting in 2006. It will be the first time a domestic firm exports modules instead of individual parts.

Along with the modules, Hyundai Mobis developed systems such as the Electronic Stability Program (ESP), Advanced Airbag System, Driver Information System (DIS), Head Up Display and Tyre Pressure Monitoring System (TPMS).

The parts maker now churns out a million ESP products per year.

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