Halla Climate Control Corp. fell the most in almost five months in Seoul trading after Hyundai Motor Co. chose Japan’s Denso Corp. to supply air-control equipment.
Halla Climate, a maker of car air-control systems and components, slumped 11.4 percent to 21,400 won at the close in Seoul, its biggest drop since Aug. 7. South Korea’s benchmark KOSPI index declined 0.6 percent.
Hyundai Motor will use Denso’s air-control parts for U.S.- made Sonata sedans, the auto company, South Korea’s biggest carmaker, said in an e-mailed response to a Bloomberg News query on Thursday. The Seoul-based company and affiliates Kia Motors Corp. and Hyundai Mobis Co. together account for 70 percent of Halla’s revenue, according to data compiled by Bloomberg.
“Hyundai is probably trying to lower its dependency on Halla, which has long been Hyundai’s key air-control parts supplier,” Kim Yoon-ki, an analyst at Mirae Asset Securities Co. in Seoul, said by phone. “It’s the right strategy for Hyundai, as it is rare and dangerous for an automaker to be that dependent on one supplier.”
The switch is part of the company’s regular supplier diversification to ensure a stable delivery of parts, Hyundai Motor said.
(Bloomberg)
