Hyundai Wia to produce in-house turbo chargers

By a2016032

Published : May 12, 2017 - 13:20 Updated : May 12, 2017 - 13:20

Hyundai Wia Corp., an auto parts affiliate of Hyundai Motor Group, said Friday it will produce in-house turbo chargers after years of joint production with its Japanese partner.

Hyundai Wia IHI Turbo, a 51-49 joint venture set up between Hyundai Wia and Japanese auto parts maker IHI, has produced turbo chargers since late 2015 for vehicles made by Hyundai Motor Co. and Kia Motors Corp. at its plant in Seosan, 151 kilometers southwest of Seoul, a Hyundai Wia spokesman said.

Hyundai Wia's turbo charger (Hyundai Wia)

The Korean parts maker has ended the joint business partnership with IHI, with the production facility to become a wholly owned unit of Hyundai Wia, he said.

But Hyundai Wia will maintain technology ties with the Japanese company, the spokesman said.

Hyundai Wia, which has largely been dependent on imported turbo chargers in the past, established the joint company to domestically produce the auto part.

A turbocharger, or turbo, is a compressor that is used to force more air into an internal combustion engine. This enhances the thermal efficiency of the engine and leads to more power output.

The Seosan plant has a production capacity of 200,000 turbo chargers a year. It produced 70,000 turbo chargers last year and aims to churn out 1.2 million units annually by 2020.

Hyundai Wia earns 70 percent of its total sales by supplying engines, modules, turbo chargers, and other parts to Hyundai Motor and Kia Motors. In the January-March quarter, the company's net profit plunged 96 percent to 2.02 billion won ($1.8 million) from 48.66 billion won a year earlier on declines in vehicle sales, according to a regulatory filing.

Operating profit fell 46 percent to 43.08 billion won in the first quarter from 80 billion won a year earlier. Sales rose 1.8 percent to 1.871 trillion won from 1.839 trillion won, it said.

Hyundai Wia is 25.35 percent owned by Hyundai Motor, 13.44 percent by Kia Motors and 1.9 percent by Hyundai Motor Group Vice Chairman Chung Eui-sun. (Yonhap)