For the Chinese market, Hyundai Mobis had recorded an order volume of $148 million in 2015, $151 million in 2016 and $289 million in 2017.
With the rapidly-growing future car market in China, including the electric vehicle market, Chinese automakers are also quickly evolving. In this context, Hyundai Mobis is expanding the supply of core auto components to major Chinese automakers and EV makers.
Keeping with this, the company is driving both the diversification and premiumization of its products such as electric park brakes (EPB), MDPS, premium sound systems, headlamps and HUD. More recently, Hyundai Mobis has been beginning to accept orders even for advanced auto components for future cars, such as autonomous driving sensors, thus enabling the lofty order forecast in China.
"We have been expanding our market share in China primarily with our core auto components based on our globally competitive quality. This year, we were able to see a dramatic rise in the amount of orders by consecutively winning orders for high-value cutting-edge products," claimed Chung Soo-kyung, Planning Director of Hyundai Mobis. "With our brand value rising alongside our cutting-edge auto components, we expect we will be able to attain an order volume of $1.07 billion in China this year."
The estimated order volume of $1.07 billion is 4 times larger than last year's.
- Winning a mega contract for supplying a massive amount of premium sound systems worth $200 million... To be supplied from 2020
What set the stage for the significant results Hyundai Mobis achieved in China this year were some contracts it won for high-value cutting-edge products. Two of these products are premium sound systems and head-up displays (HUD).
Recently, Hyundai Mobis signed a deal with one of China's top 5 local automakers for supplying premium sound systems worth a total of $200 million. The premium sound system is going to be applied to all the main models of the automaker from 2020.
Given the high entry level of the automotive sound system market where global players are competing feverishly, it is meaningful that Hyundai Mobis successfully passed through the barriers and won the global contract.
To develop audio systems optimized for the characteristics of cars and real road driving conditions, the automotive supplier has amassed its technological know-how at its dedicated sound lab, which is the largest of its kind in Korea. Then it set out to develop a premium sound system under the concept of 'Driving Concert Hall' and successfully developed and applied it to major models of Hyundai and Kia Motors, including Grandeur, Sonata and K7. Based on this technological prowess, Hyundai Mobis is also currently running a high-end premium brand called 'KRELL'.
It is said that for the contract it won, the company will apply a premium sound system that consists, on average across the car models, of an 8-channel amp and 12 speakers.
With the rapid growth of autonomous driving technology, the demand for premium sound systems is also expected to grow. According to the global market researcher, IHS Research, the worldwide market for automotive premium sound is anticipated to grow at a CAGR of 5% from about $1 billion for 2015.
- Attaining an order for high-value HUD worth $35 million... Spurring winning orders for future display products
Recently, Hyundai Mobis also signed a deal with another Chinese automaker for supplying head-up displays (HUD) from next year, which is worth approximately $35 million.
A HUD is a future display technology developed by Hyundai Mobis. It is one of the areas the company plans to focus on and is expected to become a main product when the company expands its presence in the global market.
A HUD is a system that projects a virtual image of vehicle speed, navigation and ADAS (advanced driver-assistance system) on the front windshield or separate transparent display. The HUD product which Hyundai Mobis will supply to the Chinese automaker is a premium windshield-HUD that projects images directly on the windshield of a car.
In 2015, Hyundai Mobis became the first Korean company to develop the windshield-HUD technology. Then after performing precise quality validation processes covering performance demonstration and actual car testing, the company finally succeeded in winning this contract. In addition to the windshield-HUD, the company secured its own technology last year for combiner-HUD, which uses a separate transparent display. It also completed the development of a future HUD called AR HUD (Augmented Reality HUD) using AR technology as of late last year.
Meanwhile, the HUD market in China is anticipated to grow quickly from late next year. While HUDs are currently being applied only to certain premium cars in China, local automakers plan to equip production vehicles such as SUVs with them.
"It is very encouraging to see that we have been recognized for our technology ahead of the vitalization of the Chinese HUD market," remarked Chung Jung-hwan, Parts Sales Business Director of Hyundai Mobis. "We will target the market at home and abroad more aggressively so that our new contract can drive the supply of cutting-edge auto components such as ADAS."
- Expected to exceed global order volume of $7 billion this year...Aiming to reach $10 billion by 2020
Having amassed trust with many global customers, Hyundai Mobis sharply raised its order volume by 12 times within just two years from $500 million in 2015 to $6 billion in 2017.
This year, as the company won back-to-back large-scale orders in the global market including China, the company's growth is anticipated to accelerate.
"With our partnership with global customers being solidified, we expect more large-scale orders from not only China but also North America, Europe and Japan for more and more high-value cutting-edge products," indicated a Hyundai Mobis official. "It is expected that we will be able to attain an order volume of $7 billion from global automakers this year."
Hyundai Mobis aims to maintain this momentum to attain an overseas order volume of $10 billion by 2020. In the mid to long term, it aims to attain more than 40% of its total auto components sales from global automakers other than Hyundai and Kia Motors.
To this end, the company will actively leverage its global production bases based on its power of future core technologies to diversify products into more high-value future core auto components and expand its presence in the global market. It aims to focus more on future car technologies such as ICT and diversify its customers by developing customer bases in emerging markets such as China in addition to its existing customers from North America, Europe and Japan.
After its recent division and merger, Hyundai Mobis had announced its mid- to long-term vision of transforming into a company focusing on core auto components and future technologies under its 'selection and concentration' strategy. Based on its business competitiveness it secured, the company will strive to expand sales and new revenue streams from global automakers. By doing so, it aims to ensure the possibility of sustainable growth in the future, reducing dependency on Hyundai and Kia Motors.