Global Auto Giants Recognizing Korean Car Parts

Deepak Feather, a purchasing agent for Ford, and a worker for a Korean car parts manufacturer spoke at a booth in an exhibition.

The worker showed his company’s brochure to Feather and explained which bolts are used in car manufacturing, to which Feather replied, “Very nice.”

“Ford has indirectly bought Korean parts via global car parts providers,” Feather said. “We’re considering buying parts directly from Korean manufacturers because Korean car parts have good quality and lower prices.”

“If the free trade agreement between the U.S. and Korea takes effect, tariffs on Korean products will be abolished. That means the price competitiveness of Korean products will increase and Ford will buy more Korean car parts.”

Last year, Korea shipped abroad car parts worth 12.4 billion dollars, equivalent to a third of the nation’s car exports of 35.7 billion dollars.

A considerable number of purchasing agents suggested they will purchase more Korean car parts if the free trade deal goes into effect. Yesterday, 162 firms visited the exhibition and more than half (68 U.S. and 34 European firms) were foreign manufacturers.

On the future of Korean car part manufacturers, General Motors’ vice president for purchasing showed a document listing 59 Korean car manufacturers that the world’s largest carmaker could buy from.

GM bought car parts from around 60 Korean companies in 2002, but the number increased to 137 last year.

The vice president said GM has its own list of 97 outstanding global part manufacturers, which includes 17 Korean firms. Korean manufacturers have an edge since they produce products quickly enough to go along with rapidly changing technologies, he said.

Business cards from staff of Korean car parts manufacturers piled up in the booth of Suzuki’s Hungary branch. It was surprising that Japan’s third-largest carmaker to consider buying parts from Korean firms, since Suzuki is known to buy only Japanese car parts or produce them itself.

A staff of a Korean car part manufacturer said, “We’ve provided car parts for Kia Motors,” to which Suzuki’s purchasing director Machino Noriyoshi and manager Robert Christian looked at each other with an impressed look.

The Korea Trade-Investment Promotion Agency estimated that Korean car parts manufacturers will sign purchase contracts worth around 500 million dollars at the exhibition.

“Korea’s car parts manufacturers have been recognized by global car makers,” said a team leader from the agency, Jeong Gwang-yeong. “If their technology prowess is well publicized, the manufacturers can turn into global giants like Bosch and Delphi.”