Hyundai Mobis set up its China headquarters and tapped Managing Director Chang Kook-hwan to head it in a large-scale reform of the company’ s operation designed to place it among the top five auto parts makers in the world by 2020 under its ‘2020 Global Auto Parts Top Five’  plan. The strategy is based on the projection that the company needs to produce its globally well-known, tailor-made auto parts brands in China to speed up its progress toward the target.

Officials of the Hyundai Motor Group said Hyundai Mobis set up its China headquarters in a lightning move under its strategy that will have the headquarters take charge of directing the production of key car parts including modules and auto parts.

The auto parts maker currently has seven local subsidiaries in China including three in the Shanghai area, three in Beijing and one in Tianjin. Beijing Mobis has been taking charge of the production of modules, with Beijing Transmission and other subsidiaries producing auto parts.

In the Shanghai area, Jiangsu Mobis produces modules while Shanghai Mobis and Wuxi Mobis make airbags and control equipment, the company said. Tianjin Mobis has been producing audio equipment and electronic parts that go into cars.

The company dispatched 10 officers and staff to work for the China headquarters in Beijing recently. The company has decided to create strategies for auto parts making subsidiaries in China in the near future.

Up until now, local subsidiaries in both Shanghai and Beijing reported to the Seoul head office from which they received directions for their operations, but now they are under the control of the Beijing headquarters. Likewise, the regional headquarters will take charge of almost all phases of their operations ranging from personnel, production, marketing, and other managerial affairs, independent from the Seoul head office.

Hyundai Mobis is believed to have set up its China headquarters to expedite its vision to rank among the top five auto parts makers in the world by 2020 under its Vision 2020 Strategy. It currently ranks 10th in the world.

The company needs to have great performance results in the area of modules and auto parts production. The company analyzed the trends in the auto parts markets and technologies and selected the 10 auto parts that the company will focus on to enhance their competitive edge to the extent that they would become ‘top 10 global first-class auto parts.’  They included three control parts, directional equipment, airbags, raiders and environment friendly auto parts, infotainment systems, LED headlamps, and body-related core interior parts. A key aim is for the company to be able to supply all these parts to major global automakers and not just to its affiliate automakers, Hyundai and Kia, in order to expand its sales further.

The company thought that decentralization would work better to produce tailor-made auto parts to cope with demands of various automakers, and that can only succeed through quick decisions, marketing, and operations close to the customers, giving more authority to regional headquarters.

Hyundai Mobis is one of the top 10 auto parts makers in the world, but it still is strengthening its competitive power in producing high value-added auto parts as part of its growth strategy, the company said.

The direction of the strategy means that it will focus more on high-tech auto parts production, in addition to producing general car parts for higher profit margins, the company said.

The company’s announcement in September 2008 to engage in the production of parts for electric cars is part of the strategy and the company has been supplying key parts to electric hybrid cars produced by both of its auto-making affiliates, Hyundai Motor and Kia Motors, such as the Forte, the Sonata, and the K-5 models.

Hyundai Mobis also plans to supply its key auto parts to world-renowned automakers such as BMW, Audi, Volkswagen, and GM. The company already supplies parts to Chrysler.