Automotive Parts and Accessories
Republic of Korea
Overview
2004 2005 2006(estimated)
Total Market Size 45,119 46,105 44,484
Total Local Production 48,616 50,865 50,138
Total Exports 7,022 8,241 9,111
Total Imports 2,790 3,481 3,457
(Unit: USD million)
(Source: The above statistics are unofficial estimates based upon Korea Automotive Industry Cooperative Association reports)
[USD 1= 1,200 Won (2004), 1100 Won (2005), 950 Won (2006)]
In 2005, Korea manufactured 3.5 million automotive vehicles, making it the sixth largest car manufacturer in the world after the U.S., Japan, Germany, China and France. The total size of the automotive parts market was estimated at USD 44 billion in 2006, an 11 percent increase over 2005 levels. The OEM market segment accounted for about 93 percent of total market demand and the aftermarket represented the remaining 7 percent.
Imports increased to USD 3.5 billion in 2006 from 2.8 billion in 2005, accounting for 8 percent of the total market demand. Forecasts are for continue growth with the value of imports reaching USD 4.2 billion in 2008. Japan is the principal foreign supplier with a 36 percent market share, followed by Germany and the U.S. who covers 21 percent and 16 percent, respectively.
U.S. exports were estimated at $549 million in 2005. Major U.S. export items include gearboxes, wheels, steering parts, and engine parts, among others, which together represent about half of the entire U.S. exports.
While local suppliers have greatly improved their technology prowess, mostly through technology transfer and M&A with foreign companies, they still lack core technologies in engine design, core parts development, manufacturing, innovative engine technologies including hybrid and full cell engines, precision equipment, safety equipment, etc. The Korean government evaluates Korean auto parts suppliers’ technical prowess at 77 percent of most advanced technologies. For the lack of local technologies, OEMs are still heavily relying on advanced import products, and are expected to expand global outsourcing practices. Also, Korean industry sources predict that the launch of Hyundai Motor’s manufacturing in Alabama will accelerate the trend toward global procurement.
OEMs are placing great emphasis on clean fuel technology development. Hyundai spent $1.7 billion in 2005 for hybrid engine development, 73% of its total R&D expenditure, $2.2 billion. It plans to spend another $3.2 billion in 2007 for clean fuel technology development. Hyundai aims to start commercial production of 300,000 hybrid cars in 2010, and is on the constant lookout for advanced import technologies.
Best Products/Services
For OEMs:
· leading-edge engine designing, engine control units (ECU), electronic engine parts
· advanced core parts including automatic transmissions, anti-lock brake systems and air bags
· hybrid car and pollution-free car related technologies
For the aftermarket:
· road wheels
· replacement parts
· spark plugs
· ignition cables
· timing belts
· wiper blades
· high-end car audio systems and components
· high-performance automotive chemicals, such as wax and rust-proofing solutions and accessories like window films.
Opportunities
Partnering with qualified and capable Korean distributors who maintain sales networks to serve end-users is strongly recommended. Exhibiting at local automotive trade shows can be a useful platform to explore the market and gain exposure to end-users.
To take advantage of growing market opportunities, several non-Korean parts suppliers have established wholly owned manufacturing plants or joint ventures with local Korean companies. According to the latest statistics, there are about 920 auto parts manufacturers operating in Korea, and 240 of them are non-Korean owned, either fully or partially.
Resources
Trade Show
Korea Autoparts & Accessories Show 2007 (KOAAshow 2007)
Key Contact
Ministry of Construction and Transportation
http://www.moct.go.kr/EngHome/
Local Contact
(Mr.) Young Wan Park
Commercial Specialist
Commercial Service Korea
U.S. Embassy
32 Sejong-ro Jongro-gu
Seoul 110-710 Korea
Tel: 82-2-397-4164
Fax: 82-2-739-1628
Email: young.park@mail.doc.gov
Website: www.buyusa.gov/korea