Tech leak fears haunt Korean carmakers

Korean carmakers are raising concerns about technology leaks, particularly to China, where they claim local firms are eager to quickly replicate the recent successes of their Korean rivals in global markets.

Prosecutors said Thursday that they raided a Hyundai Motor and GM Korea contractor last week on suspicions that it had transferred engine design technology to a Chinese firm.

The engine-developing company, Blue Planet, was set up in 2001 by a group of former workers of Hyundai and other Korean automotive companies, and some of the researchers are said to have kept crucial data related to engine development.

“We have seized evidence to prove their criminal acts,” said a prosecution official. “The leaked technology is believed to have been transferred to a Chinese firm,” he added, declining to name the company.

As the tech leaks seem to be ongoing, the prosecution is also looking into whether the researchers have any collaborators within Hyundai and GM Korea, the Korean unit of General Motors.

“The allegedly leaked technology is not the latest data. At least, it is more than 2 years old,” said a Hyundai spokesperson. “We will closely watch the ongoing investigation and take action following the results.”

The investigation comes amid an upsurge in the number of information and technology leaks to foreign countries here as Korea has become a global manufacturing powerhouse and home to leading electronics, shipbuilding and automotive firms.

According to the National Intelligence Service, 49 leaks were detected last year alone, with most of the leaked data going to China.

More recently, the nation’s automotive industry has been hit hard by technology leak fears as Chinese firms prefer to copy Korean technology rather than that of German or Japanese carmakers, industry sources say.

“Korean firms are known for their assembly and processing technology, which may be easier for Chinese firms to adopt,” an automotive expert said on condition of anonymity, adding that it was still extremely difficult for them to commercialize the technology right away.

“For carmakers, it is also tricky to evaluate the exact size of the damages and claim proper compensation. The lax punishment has created a vicious circle,” he added.

Following several leak cases in recent years, Hyundai, the nation’s largest carmaker, has been tightening its security. Last year, the company for the first time appointed a former ranking police officer as its new security adviser.

By Lee Ji-yoon (jylee@heraldcorp.com)