Hyundai Mobis_Business Report FY2008

Business Highlights

Highlights in FY2008

Financial Overview (iin billions of won)
- FY2008 FY2007 Rate of
Sales 937.3 8,490.9 10.4% Sales at the Module Division stood at 6,174.1 billion won, which accounted for 66 percent of the Company's overall revenue.
Operating income 1,186.5 824.5 43.9% -
1,089.9 776.6 40.3% Net income exceeded 1 trillion won for the first time in the Company's history.

New companies


The Company will establish a subsidiary, Mobis Module CIS (MMCIS), in St. Petersburg, Russia. The Group, which has invested 100 million US dollars in the project since 2006, is going to start building a plant there, aiming to finish it in 2010. The new plant is going to supply cockpit modules and bumpers to Hyundai Motor's plant in Russia that will launch operations in early 2008. (From a press release on Mar. 4, 2008)

The Company started constructing a new plant in Russia. Scheduled to be completed by 2010, the facility will manufacture 100,000 modular products a year, including cockpit modules, instrument panels, consoles, and bumpers for Hyundai Motor's vehicle assemble plant in Russia. Commercial production is scheduled to begin in Jan. 2011. (From an announcement made by the company in Jul. 2008)


-Zhe Jiang Zotye Auto

The Company has signed an agreement with Zotye Auto of China under which it will supply brake parts for around 300,000 of Zotye's Lybra. Under the agreement, its Wuxi Plant will manufacture approximately 40 million dollars worth of brake components for Zotye over the five-year period of the agreement, which starts from 2009. The Company, which has accumulated a total of 160 million US dollars in orders in China since 2006, expects the volume to outreach 200 million US dollars by the end of 2008. (From a press release on Apr. 27, 2008)

-Beijing-Hyundai Motors

The Company has been supplying manual transmissions for the Beijing Hyundai New Avante since Apr. 2008. These transmissions are manufactured at Beijing Mobis Transmission, mounted in chassis modules at Beijing Hyundai Mobis Automotive Parts, and delivered to the New Avante assembly lines at Beijing Hyundai. Beijing Mobis Transmission, which launched production in 2004, now has the capacity to build 400,000 transmissions per year. It is supplying 5-speed manual transmissions for the Elantra, Sonata, and Tucson made by Beijing Hyundai ; and the Cerato, Optima, and Sportage made by Dongfeng Yueda Kia. (From a press release on Apr. 8, 2008)



The Company has produced an aggregate total of 1 million transmissions in China since its subsidiary, Beijing Mobis Transmission Co., Ltd., began production in 2004. Beijing Mobis' annual production volume, which stood at 52,000 units initially, increased to 260,000 by 2007. It expects its FY2008 production volume to reach 313,000 units, which will boost its cumulative production volume in China to 1.1 million units. The subsidiary's yearly production level reached 400,000 transmissions after Jan. 2008, when it completed its second plant in Beijing, which is capable of producing 200,000 transmissions per year. The new Beijing Plant mainly produces 5-speed manual transmissions, supplying them to 11 vehicle models including the Elantra and Sonata manufactured by Beijing Hyundai ; and the Optima and Sportage manufactured by Dongfeng Kia. In 2007, the plant also started delivering transmissions to Kia's plant in Slovakia, where they are being installed on the gasoline-powered Kia Sportage being assembled at the plant. Hyundai Mobis intends to expand exports to Europe and Russia from Beijing Mobis. (From a press release on Oct. 7, 2008)


The Company has produced a combined total of 30 million chassis modules and cockpit modules since it began producing them. In 1999, its Ulsan facility in Korea produced the first chassis module, supplying it to the Hyundai Trajet. Since then, the Company has been expanding its module business globally, having produced 17,150,000 chassis modules and 12,850,000 cockpit modules in total. It is the first company to produce 30 million of these core automotive modules. (From a press release on Sep. 9, 2008)

In Jul. 2008, Mobis Automotive Czech s.r.o. in the Czech Republic began trial production of modular products. Commercial production is scheduled to begin in Nov. 2008. (From an announcement made by the company in Jul. 2008)


The Company's new lighting plant, which is currently under construction in Gimcheon, Gyeongsangbuk-do, Korea, started trial production. The facility is built on 137,350 square meters of land with a building area of 22,880 square meters. Commercial production is scheduled to begin in 2009. (From an announcement made by the company in Jul. 2008)

New business

The Company will acquire the hybrid vehicle parts manufacturing business of Hyundai Rotem Company for 13,553 million won. The acquisition will enable the company to launch operations in the area of core parts used in low-emissions vehicles. Hyundai Rotem is the heavy industry manufacturing unit in the Hyundai Motor Group. (From a press release on Nov. 3, 2008)

The Company will launch operations in the area of automotive parts for hybrid vehicles, investing more than 100 billion won by 2012 in order to start operations in this new sector. It will mainly produce drive motors and integrated package modules (IPMs). In Dec. this year, the Company will begin trial production of parts for use in the Hyundai Avante LPI hybrid vehicles, with plans to begin commercial production of these parts in May 2009. By 2010, when the Hyundai Sonata hybrid goes into production, the Company plans to have completed a new plant dedicated to the production of hybrid components. (From a press release on Oct. 27, 2008)

Business plans (FY2009)

The Company announced its business targets for 2009. It aims to generate 8.9 trillion won in domestic sales in Korea and 6.7 billion US dollars in export sales, which add up to 1.5 trillion won. The Company's module division plans to increase sales in Europe and the U.S.A. once its new plants in Georgia (U.S.A) and the Czech Republic become fully operational. Its R&D spending is expected to reach 200 billion won, a rise of 60 percent from the amount spent in 2008, with development activities focusing on strengthening the hybrid and electric device segments. The Company is currently setting up production operations to make major parts such as drivetrain motors and integrated package modules (IPMs) for hybrid vehicles. These products will be featured on the Hyundai Avante LPI and the Kia Forte Hybrid, new models coming to the market in late 2009. (From a press release on Jan. 10, 2009)


R&D Structure
Facility Location
Yong-in (CarTronics) R&D Center Yong-in,
Shanghai R&D Center Shanghai,
Detroit R&D Center Detroit,
Frankfurt R&D Center Frankfurt,


The Hyundai Motor Group held a ceremony to celebrate the completion of its new research center in Uiwang City, Gyeonggi-do. The group invested a total of 160 billion won to build the 15-story research center building, which has three underground levels and is built on approximately 80,000 square meters of land. The new facility will house R&D functions of five Hyundai group companies, namely, Hyundai Motor Company, Hyundai Autonet, Hyundai Rotem, WIA, and Autoever Systems. Major research facilities will include the plastic research center of Hyundai Motor, the electronics research center of Hyundai Autonet, and the auto parts research center of WIA. (Form a press release on Oct. 21, 2008)

The Company established a research center within the premises of its technical center in Yong-in. The new research center designed to deal with quality is the first of its kind to be set up by a Korean auto parts supplier. The new center, by improving product quality from the initial stage of development, will enable the Company to reduce development lead-time by around six months on an average by minimizing the amount of possible troubles that might arise during the mass-production stage. (From a press release on May 8, 2008)


The Shanghai Technology Test Center of the Company was certified as an excellent auto parts testing facility by China's certification authority. This means that products, which pass the Shanghai center's screening, will thereafter qualify as Chinese government-certified products. As a result, the amount of time needed for the Company's parts to be certified will now be reduced to less than half of what it was previously, which was at maximum four months. At the same time, the Company will also be able to reduce costs for obtaining the certification by 30 percent. It became the first Korean manufacturer and one of some 20 automotive companies in the world to gain the Chinese government certification. (From a press release on Nov. 11, 2008)

R&D Expenditure (Non-consolidated) (in billions of won)
- FY2008 FY2007 FY2006
Amount 1,212 929 806
% of sales 1.29% 1.10% 0.99%

R&D activities (FY2008)

-Adaptive Front Lighting Systems

The Company successfully started mass production of Adaptive Front Lighting Systems (AFLS) in Korea for the first time, after spending 18 months and investing a total of 3 billion won to develop them. Its AFLS system is designed to ensure drivers have an appropriate field of vision by offering optimal lighting levels according to driving conditions, road conditions, and weather. For example, when drivers are on highways, the system illuminates the area far out in front; and when drivers are in the city, the system reduces glare to oncoming drivers by dispersing light at a wider angle. The new system, which is 50 percent lighter than existing products, is also 30 percent less expensive to produce. Future development plans include working on an AFLS using LEDs. The Company has been expanding sales to non-Korean automakers and parts manufactures through its automotive lighting plant in Jiangsu Province, China that it established in 2005. The Company has already supplied 30 million US dollars worth of automotive lighting products to Zhe Jiang Zotye Auto Co., Ltd. of China. (From a press release on Dec. 24, 2008)

-Brake systems for commercial vehicles

The Company has developed MEB2-AT brake systems for commercial vehicles, after spending two years and investing around 10 billion won in the development project. The MEB2-AT brake systems will be manufactured at the company's plant in Wuxi, China. They first will be installed in the County and the Mighty manufactured by Hyundai Motor. The Company successfully reduced the weight of the new brake system, which weighs 2.2 kilograms or only one fifth of comparable products imported from overseas. By replacing imported brake systems with the MEB2-AT systems, it expects to achieve a benefit of 100 billion won over the next five years. (From a press release on Nov. 26, 2008)

-Integrated chassis control systems

The Company will conduct a series of test drives of its integrated chassis control systems at its Winter Road Test Course in Wanaka, located in the south island of New Zealand. The focus of the test runs will be to check the performance of the Mobis Electronic Brake (MEB) systems and Electronic Stability Control (ESC) systems for the NF Sonata (Development code: NFC) being designed for the Chinese market. The testing program will be held over a period of four weeks, starting from the end of Jun. 2008. (From an announcement by the company in Jul. 2008)

-Airbag systems

The Company announced that it has developed for the first time in Korea Lower Risk Deployment (LRD) airbags, which protect children and elderly people sitting in passenger seats from impacts caused by airbags when they deploy. This LRD technology, on which the Company spent 1 billion won since 2006 to develop, is expected to be featured on all Hyundai and Kia vehicles to be marketed in North America, following the first installation in their two models coming to the market in the second half of 2008. Its LRD systems meet the U.S. Federal Motors Vehicle Safety Standards (FMVSS No. 208) defined for occupant crash protection. The LRD systems offer enhanced passenger safety especially on children under six, and on elderly people, sitting in passenger seats by reducing the impact caused when airbags inflate, dispersing the shock laterally. The new technology is expected to cut vehicle production costs by about 100,000 won per unit or 40 billion won on a yearly basis. In addition, the LRD airbags weigh two kilograms less than conventional ones, which helps cut fuel costs and protect the environment. (From a press release on Mar. 31, 2008)

-MEB(Mobis Electronic Brake)

The Company had developed what it is calling its Mobis Electronic Brake, which is a new anti-lock brake system (ABS) and an electronic stability control (ESC) system. It will start mass producing the new compact ABS unit, which is 30 percent smaller than existing ones, in China by the end of June this year. The Company, which intends to further strengthen its development activities on integrated vehicle control systems, is integrating its motor drive power steering (MDPS) system, it has been mass producing since 2006, and its air suspension and airbag technologies featured in the Hyundai Genesis luxury sedans, into this new system. (From a press release on Feb. 27, 2008)

-ABS systems for commercial vehicles

It became the first Korean company to succeed in developing ABS systems for commercial vehicles. The Company, which had already completed a series of performance tests on its commercial-vehicle ABSs, plans to launch commercial production of them in the middle of 2008. These ABSs will be supplied to Hyundai's trucks and buses including the Mighty and County. By producing these locally in Korea instead of importing them from overseas is expected to result in more than a 100 billion won reduction in the next five years. (From a press release on Feb. 27, 2008)

Investment Activities

Capital Expenditure (in billions of won)
- Amount invested in FY2008 Planned amount of investment from FY2009 onwards

Purpose of investment

Module Business 78.6 56.3 -
-Gimcheon plant 25.7 8.9 Establishing production lines to make lamps
-Changwon plant 4.7 28.3 Establishing additional production lines to manufacture hydraulic brake systems
Other Business 60.5 16.6 -
Total 139.1 73.0 -

Investment project

In FY2009, the Company plans to invest 28,335 million won to establish additional production lines to manufacture hydraulic brake systems.