EV car concept model “45.” based on the Electric-Global Modular Platform (E-GMP). (Photo: Hyundai Mobis)

Hyundai Mobis, the automotive part subsidiary of Hyundai Motor Group, chalked double-digit growth in operating profit last year on the back of Hyundai Motor and Kia Motors’ improved business performances and in the electrification sector.

Hyundai Motor, Kia Motors and other major subsidiaries of the group saw their combined sales top 200 million won last year for the first time.

Hyundai Mobis posted 38.048.8 trillion won in sales, 2.359.3 trillion won in operating profit, and 2.294.3 trillion won in net profit, the company said on Jan. 30.

The figures represent an 8.2 percent rise, a 16.5 percent surge in operating profit and a 21.5 percent jump in net profit, year-on-year, respectively.

Last year’s Q4 sales and operating profit stood at 10.403.7 trillion won, up 7.9 percent year-on-year and 634.4 billion own up 9.1 percent year-on-year, respectively.

Hyundai Mobis’ good business performance was primarily owed to a rise in sales and profitability, prompted by expanding SUV sales by Hyundai Motor and Kia Motors.

Hyundai Motor’s SUV Palisade and Kia Moor’s large-size SUV Telluride enjoyed popularity in Korea and North America.

Small- and mid-size SUVs such as Kia Motors Seltos, Hyundai Motor Kona and Tucson also got a good reception in Korea, emerging markets and Europe.

SUVs are more profitable than Hyundai Motor and Kia Motors’ conventional flagship mid-size sedans. The effect of a weak Korean won was also partly attributable to the two automakers’ improved business performances.

Hyundai Mobis said the rising sales of the electrification automotive parts business also contributed positively to boosting the automotive parts makers’ business performance.

The electrification automotive parts business of EVs, hybrid electric vehicles (HEVs) and plug-in hybrid electric cars (PHEVs) and fuel cell electric vehicles (FCEVs) saw sales top 1 trillion won in 2017 for the first time continuing to rise to 1.8 trillion won in 2018 and 2.8 trillion won last year.

The business maintained a whopping 50 percent annual growth rate since then.

In particular, Hyundai Mobis forecasted 3 trillion won in sales in 2020, but the automotive parts maker achieved the target one year faster. Hyundai Mobis expects the electrification automotive parts business to continue its explosive growth.

The automotive parts maker plans to introduce the Electric Global Modular Platform (E-GMP), an exclusive model for EVs, next year.

Song Sun-jae, a researcher with Hana Financial Investment, said Europe’s strengthening of environment rules will prompt Hyundai Motor and Kia Motors’ production of eco-friendly cars, and Hyundia Mobis is forecast to see sales in the electrification automotive parts business shoot up more than 30 percent.

Hyundai Mobis has set this year as the first year of a full-fledged growth of the electrification automotive parts business.

Hyundai Mobis plans to invest about 4 trillion won in the production of electrification vehicles and somewhere between 3 trillion and 4 trillion won in R&D of future cars such as EVs and self-driving cars.

Hyundai Mobis will put into operation battery assembly lines in the Czech Republic and Slovakia this year.

The upcoming battery assembly lines will be the first overseas facilities to produce electrification automotive parts, and they will mass produce battery system assemblies, a Hyundai Mobis official said.

Hyundai Mobis strives to expand customer base to supply automotive parts to global automakers on top of Hyundai Motor and Kia Motors.

The automotive parts maker won automotive parts orders worth $1.76 billion (2.088 trillion won) from global automakers other than Hyundai Motor and Kia Motors last year.

The figure fell short of meeting the target of $2.1 billion, but it represented a 5 percent year-on-year rise.