Hyundai Transys Inc. - Jigok Plant (Formerly Hyundai Powertech Co., Ltd.) Business Report FY ended Dec. 2019

Financial Overview (Non-consolidated)

(in million KRW)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 Rate of Change
(%)
Sales 7,678,096 4,266,845 79.9
Operating income 172,016 143,782 19.6
Net income 130,185 53,405 -

-Sales to affiliated companies including Hyundai Motor accounted for 96.7% of total in fiscal year ending December 31, 2019.

  

Recent Development

-The company was officially launched as Hyundai Transys on January 2, 2019.

 

Business Partnership

Memorandum of Understanding (MOU) signed with Brose, Germany for joint development of seat components for autonomous and electric vehicles
-The Company and German-based Brose (Brose Fahrzeugteile GmbH & Co. KG) have signed a memorandum of understanding (MOU) for the joint development of seat components for autonomous-driving cars and electric vehicles (EVs). Based on this agreement, both companies plan to develop several types of seats which include: depending on the situation freely-rotational and movable seats for autonomous driving vehicles, equipped with built-in seat belts (BIS, seat belts integrated with the seat frame); smart-integrated-control seats which control the in-vehicle environment by utilizing smart advanced technologies to provide customized convenience for each passenger; and for improved fuel economy ultra-slim lightweight seats made of new materials. Both companies aim to launch the production of seats adopting these new technologies in 2024. (From a press release on December 9, 2019)

Contract signed with BYD of China to strengthen R&D and cooperation in transmission development
-The Company signed a memorandum of understanding with BYD from China to enhance their strategic partnership. The deal will focus on timely supply of transmissions, expanded exchange of technology and R&D between the two companies, and the study on cooperation in the development of the entire transmission lineup. Under the contract, BYD will give priority to the products of the Company in early stages of the development of all new car projects. Also, the Company will promote the expansion of supply to BYD to include dual clutch transmissions (DCTs), continuously variable transmissions (CVTs), and hybrid transmissions, for example, on top of automatic transmissions (ATs). (From a press release on May 15, 2019)

 

Contract

-The Company signed a seat supply contract of KRW 1 billion (JPY 93 billion) with a US-based EV manufacturer Rivian Automotive LLC. This deal is valid from 2020 to 2027. Hyundai Transys expects that Rivian will use the seats for the R1T, mid-size pickup truck to be released in the second half of 2020, and the R1S, mid-sized sport utility vehicle (SUV) to be released in the second half of 2021. (From a press release on May 22, 2019)

 

R&D Expenditures (Non-consolidated)

(in billion KRW)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 FY ended Dec. 31, 2017
Overall 156.1 81.6 83.4
As percentages of total sales (%)

2.59

2.96 2.08

 

R&D Activity

-The Company unveiled its aggressive expansion strategy in the automotive components business in China at the 2019 Auto Shanghai, which began on April 16, 2019. The company’s booth at the auto show was divided into two sections: powertrain zone and seat zone. The exhibits in the powertrain zone are categorized under property-based themes such as eco-friendly (electric transmissions), comfort (AT, CVT), connections (axles, 4-wheel-drive) and dynamic (DCT, MT). Meanwhile, in the seat zone, it showcased high-end seat products for the Hyundai Genesis G70, G80 and G90, for example. It also showed seat simulations for autonomous driving vehicles and explained the growth strategy for becoming a leading manufacturer of next-generation automotive seats. “We’ll maintain the 10-year-long relationships with 19 Chinese automakers, while we try to find new customers,” the company explained. (From a press release on April 19, 2019)

 

R&D Facilities

-The company has two R&D centers in Korea (the Dongtan Seat R&D Center and the Hwaseong Powertrain Research Center) and one in Michigan, USA.

 

R&D Achievements

-In the fiscal year ending December 31, 2019, the company conducted research and development in the following areas.

Product Installed vehicles
Transmission

-AT and MT for passenger cars, transmissions for hybrids.

-MT for light-duty, medium-duty, and heavy duty trucks and buses, AMT for hybrid buses.

-Passenger cars (G90, G80, G70, K9, Stinger, etc.). SUV (Sorento, Tucson, Sante Fe, etc.).

Axle -Axles for passenger cars (Starex, Porter, etc.), axles for light-duty, medium-duty, and heavy-duty trucks and buses.
-Axles for Ssangyong Motor and export vehicles.
4WD -Electronically controlled transfer case for SUV.
Reduction gear -Reduction gears for EV passenger cars, reduction gears and integrated drive motor system.
Seats -Production models: Stinger, G70, G90, Pride (Mexico), i30 (Czech Republic), Accent (India), ix35 (China), Creta (Brazil).
-New development models: G80, GV80, compact SUVs (China), mid-size CUV (China).

  

Investment Activities

<China>
-The Company has built a new plant in Rizhao, Shandong, China. It manufactures transmissions for green cars and seats for autonomous driving cars. Its annual output is expected to meet the needs of around 300,000 vehicles. It will be Hyundai Motor Group’s first plant to produce transmissions for green cars in China. (From some releases on January 21, 2019)

<India>
-The Company will build its second plant in the state of Andhra Pradesh in India. The new plant will supply 5 and 6-speed manual transmissions to a local car assembly plant of Kia Motors Corporation which is planning to start mass production in August 2019. Upon the completion of the second plant, the company will have a capacity to make 180,000 transmissions a year in India. The Company currently has a plant in Chennai, India, that delivers seat systems for the local arm of Hyundai Motor Company. (From some releases on February 20, 2019)

-The Company announced the launch of regular production at its plant in Anantapur in the state of Andhra Pradesh, India, on July 30, 2019. This plant produces manual transmissions and seats for the SP2i, Kia’s strategic model for the Indian market. For Hyundai Transys, it is the second plant in India, following the one in Chennai. (From a press release on August 2, 2019)

Investment Amount

(in billions of KRW)
Region Contents 2019 investment (actual) 2020 investment (forecast)
Korea New model development and R&D 425.9 330.6
Oversea New model development and R&D 108.8 126.6
Total - 534.7 457.2