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Auto parts gain traction in growth, international reputation Updated: 2014-03-18 21:57:14 KST

 Auto parts gain traction in growth, international reputation
This factory produces automobile engines and transmissions, 24 hours a day, seven days a week to ensure that shipments meet order deadlines.
That's because demand for its products soared 12 percent from a year earlier, largely because of orders from automakers overseas, which now represent some 40 percent of the plant's overall production.

"The global market recognizes the high quality of Korean-made auto parts.
In our case, we do not engage in aggressive promotion, but foreign buyers directly contact us for supply contracts."

This plant epitomizes the steady growth in exports of Korean auto parts, which is about double the pace of that for completely assembled cars.
The recent expansion of overseas production by local automakers Hyundai and Kia helped increase auto parts exports, but GM, Ford, Volkswagen and other foreign companies accounted for well over a third of the parts exports.

"Korea's autoparts exports logged a record 26 billion dollars last year to become the country's seventh biggest export item.
The industry is gaining momentum as it diversifies trade partners but it faces tough competion as it tries to move up in the industry's pecking order."

The toughest competition.. comes from Japan.
According to a report released Monday by the Korea International Trade Association, Korea's auto parts' export similarity index with Japan hit the highest at 0.5-6 meaning over half of the industry's export items are identital to those of Japan's.

"Many Korean auto parts have a competitive edge in pricing over those from Japan and Germany while offering just as good a quality. But market leaders in Germany and Japan keep pushing for higher standards, just as Chinese makers are fast catching up."

Experts say the big challenge for Korean auto parts makers is improving their research and development capabilities, particularly for environmentally friendly automobiles such as electric cars.
Song Ji-sun, Arirang News.
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