SEOUL, KOREA - Korea’s auto parts exporters have been riding high in the global market in recent years. For the last ten years, exports of auto parts have demonstrated remarkable growth, from USD 2.2 billion in 2001 to USD 24.6 billion in 2012. This success can be attributed to a variety of factors. The advancement of Korea’s automobiles, and the companies’ strong demand for lowering costs while improving quality has allowed auto parts companies to secure both cost and technology competitiveness. On top of this, recent FTAs with various countries including the U.S. and European nations eliminated all tariffs on auto parts, providing them with increased opportunities to break into the global market.
GMB Korea is one of the auto parts companies which have displayed remarkable success in the global market recently. Despite the global economic slowdown, the auto parts maker posted USD 386 million in sales last year, with exports accounting for 28% of their total sales. At present, the company has various clients including Hyundai, Kia, GM, Volkswagen, Renault, Nissan, GKN and Jatco, as well as a number of global auto parts companies.
GMB Korea, established in 1979 by its parent company, GMB Japan, successfully adopted advanced processing technology from Japan and subsequently led the development of Korea’s auto industry for the past few decades. Its Auto T/M part, Constant velocity joint parts, and electronic water pump already dominated the domestic market, and they have also been well received in the overseas market.
CEO of GMB Korea, Byun Jong-Moon, attributed this success to the company’s leading-edge technologies. “To start, our strength lies within our own technology, particularly in mechanical structure design technology, motion control technology to run motors freely, algorithm programming technology, and communications technology between the engine and battery CPU.”
GMB Korea has also succeeded in reducing costs by focusing on timely investment of facilities and productivity improvement. This has allowed the company to achieve economies of scale in production. This endeavor led to a whopping 41% growth of Unit Per Hour (UPH) in 2011, compared to their 2005 figure for the valve spool production in Auto T/M. The adoption of the Enterprise Resource Planning (ERP) system also led to improvement of management efficiency, subsequently easing the cost burden associated with management.
This year, GMB Korea set a new goal of reaching 700 billion won (USD 630 million) in sales by 2016 under the slogan of ‘World Wide, Innovation, New Dream - WIND 7000’. “Currently, we possess one top-ranked product in the global market, the spool valve of the Auto T/M part, but we are confident that our constant velocity joint and electronic water pump will also achieve the top product positioning globally by 2016,” he said.
He emphasized that, “In terms of spool valve and constant velocity joints, technology development is already mature within the industry. Both GMB Korea and our rivals possess world-class level technologies, so what has allowed us to become the winner in this race is our cost competitiveness versus our competitors.”
“As for the electronic water pump, which is a vital component for green cars, the technology isn’t yet mature. This product is used to cool off heat generated by green cars’ electricity by the circulation of water. Demand for this electronic water pump is expected to grow substantially as vehicle emissions controls are becoming more stringent worldwide. Thus far, GMB Korea has managed to gain a competitive edge on its competitors in terms of technology,” he continued.
Last November, GMB Korea was listed on the stock exchange to take the next step forward. As GMB Korea successfully broke into the global market, they set a new goal of becoming the top auto parts maker in the global market instead of focusing on the market dominance at home.
Global GMB Group set up production corporations in Japan, China, and Thailand, and plans to expand them into Russia, India, and Mexico in the near future. This has helped them to secure cost competitiveness, find new clients, and provide reliable supply in the overseas market.
Prior to joining the company, Byun worked for Hyundai Motors for 14 years and contributed to the construction and operation of engine and transmission plants. Later, he moved to Hwashin, an auto parts maker and a partner company of Hyundai, where he spent 10 years, and developed the car suspension which was a new concept, core parts which connect the car body and wheels. The suspension that he worked on was successfully applied to Hyundai’s every new passenger car model.
In 2002, Byun began to serve as the CTO of GMB Korea, subsequently contributing his extensive expertise in the auto industry. His focus on securing market power based on cost and technology competitiveness led sales of the company to jump from USD 143 million in 2002 to USD 386 million last year, despite the global economic slowdown. “GMB Korea is ready to step into the spotlight and become a publically traded entity. With our cost, technology, and green competitive edge, we are fully confident of reaching WIND 7000 by successful integration into the global market.”