Hyundai Mobis, an auto parts manufacturer under Hyundai Motor Group, is looking to expand relations with Chinese electric vehicle giant BYD in an apparent move to diversify its profit sources outside of Hyundai and Kia.
According to industry sources Monday, a group of Hyundai Mobis officials visited BYD’s headquarters in Shenzhen last month. Currently, Hyundai Mobis supplies steering parts to BYD, the No. 1 EV maker in China. During the visit, sources say, the two companies discussed ways to further bolster their ties, though details were not immediately disclosed.
“The Korean delegates looked around BYD’s exhibition hall quite thoroughly,” said a Shenzhen-based source who wished to be unnamed.
The main exhibition hall at BYD’s headquarters has a wide variety of content on display, from information detailing the growth of the EV giant, to its latest state-of-the-art technologies -- such as the patented cell-to-body battery and near-inflammable blade battery -- and actual BYD cars.
A Hyundai Mobis official also confirmed the visit but declined to elaborate further.
“Our officials visited (BYD) to discuss expanding our partnership to (supply) more of our products on top of the steering parts,” he said.
The recent visit comes as Hyundai Mobis ramps up efforts to diversify its clientele. In an investor relations event in Seoul on Nov. 19, CEO Lee Gyu-suk announced a goal to increase non-Hyundai Motor Group-related sales to 40 percent of its total revenue by 2033 from the current 10 percent.
Hyundai Mobis logged $9.2 billion in orders from global automakers excluding Hyundai Motor and Kia last year, a significant increase from $4.6 billion in 2022.
Hyundai Mobis also unveiled that it now has 24 global partners worldwide, including BYD, adding that it has secured nine new clients since 2020.
Axel Maschka, vice president and head of global sales at Hyundai Mobis, pointed out that the Korean auto parts maker will expand global business with a focus on five original equipment manufacturers, or OEMs -- Stellantis, Volkswagen, General Motors, Mercedes-Benz and Mitsubishi -- based on their trusted customer relations.
Earlier this year, Hyundai Mobis participated in the 2024 Beijing International Automotive Exhibition, also known as Auto China, held from April 25 to May 4. Seeking to attract Chinese customers and expand its Chinese businesses, the Korean auto parts manufacturer organized private booths to sit down with potential customers during the event.
According to Hyundai Mobis, it sent invitations for closed-door meetings to 80 companies, including BYD, Geely, Volkswagen and Stellantis.
Kim Pil-su, an automotive engineering professor at Daelim University, underscored that it is important for Hyundai Mobis to move away from Hyundai Motor and Kia to reduce dependence on the conglomerate’s affiliates.
“(Hyundai Mobis’ visit to BYD headquarters) is a positive sign and it’s something that (Hyundai Mobis) must do without a doubt,” he said.
“If (Hyundai Mobis) cannot reduce its reliance on Hyundai Motor and Kia, it will not be able to survive. So diversifying its customer portfolio should be activated even more. In order to do that, Hyundai Mobis has to bolster its R&D capabilities. The company is not in a position to selectively choose customers.”
