Hyundai Motor Group Executive Vice Chairman Chung Eui-sun gives a welcoming speech as a joint chair of the G20 energy and environment ministers’ meeting in Karuizawa, Nagano Prefecture, Japan, on June 14. (Photo: Hyundai Motor Group)

Hyundai Motor Group Executive Vice Chairman Chung Eui-sun hurriedly made a visit to Japan recently as concerns mount that Japan’s export curbs to Korea on the semiconductor and display fields could expand to the carbon textile and automobile sectors.

His trip to Japan may be construed as a move to take stock of the company’s parts supply chain in Japan and minimize the consequences the possible expansion export restrictions would have on advanced automobiles, to which industry Hyundai Motor Group is attaching priority.

Upon wrapping up his visit to China, Executive Vice Chairman Chung went to Tokyo, the group said on July 18. Officially, he made a trip designed to give words of encouragement to a Korean national archery contingent prior to the 2020 Tokyo Summer Olympic Games, to be held in next year. But after wrapping up his itinerary, Executive Vice Chairman Chung had meetings with officials at Japanese parts and material maker to examine the supply chain in Japan.

An official with the Korean automobile industry said, though specifics on Executive Vice Chairman Chung’s movements there are unknown, he was believed to have an itinerary to explore solutions for Japan’s possible export curbs.

Among Japanese companies whose manages would possibly meet with Executive Vice Chairman Chung were those with carbon textiles, specialized magnets electric motors and others, primarily related with the advanced future automobile industry. Japanese companies such as Toray, Sumitomo Metal Industries, Asahi Kasei, and Renesas Electronics were mentioned.

Electric motors supplied to Hyundai Motor and Kia Motors contain specialized magnets, made with rare-earth elements. Sumitomo Metal Industries developed the specialized magnets for the first time in the world in 1982. The company, and other Japanese companies, dominate the market.

Toray’s carbon textiles are used to produce hydrogen containers for Hyundai Motor’s hydrogen fuel cell vehicle Nexo. Hyundai Motor Group maintains a close partnership with not only Infineon, but also Renesas Electronics to receive supplies such as vehicle semiconductors essential for electricity and driving gear. Asahi Kasei provides ion-exchange membrane and ionomer for fuel cell to the Korean automakers.

Japan has not yet made it official that it would impose export restrictions to the automobile field. But Executive Vice Chairman Chung’s move may be interpreted as his attempt to take preemptive steps to brace for the prolonging of Japan’s export curbs and the outbreak of contingency cases.

The Japanese government has signaled the possibility of imposing additional export curbs to Korea to put pressure on the Korean government. It had threatened to remove Seoul from its list of countries subject to eased customs shipping-clearance procedures when importing goods from Japan.

It is feared to cause even greater damages to Korean industries depending too much on Japanese imports. The next targets of Japan’s export curbs are mostly likely to be parts and raw materials in the electronics, machine tool, vehicle battery sectors, most closely related to the automobile industry.

The Korean automobile industry maintains that the expansion of Japan’s export curbs would have an immediate impact on Korea. An industry official said more than 95 percent of the internal combustion engine car segment has been localized.

Korean automakers have received some precision parts and materials from Japan, and they can be replaced by German-made ones. The problem is that Korea highly depends on Japan for not only hydrogen fuel cell car materials, but also future car parts and materials such as EV motors and vehicle semiconductors.

Hyundai Motor Group is trying to diversify supplies of EV batteries and hydrogen fuel cell car parts and materials, but so far the Korean company has been unsuccessful since Japanese companies have better economies of scale, technology and a competitive edge.