[K-Manufacturing, On Site] 'TOP1 Genesis Quality Assurance' Hyundai Wia Changwon Plant 2

Full Factory Operation as Demand for All-Wheel Drive Vehicles Increases with Production of ATC and e-LSD

[Asia Economy Changwon=Reporter Yoo Je-hoon] 'Global TOP1 Genesis, guaranteed by my own hands.' This banner was attached to the ceiling of Hyundai Wia Changwon Plant 2, a building with a total floor area of about 20,000㎡ (6,100 pyeong) on a site of approximately 79,000㎡ (24,000 pyeong). Adopted through an employee contest about a year and a half ago, this slogan seemed to express Hyundai Wia's pride in being responsible for the 'heart' of Genesis.

The impact of the COVID-19 pandemic, which swept the world last year, completely changed the consumption landscape of modern people. As non-face-to-face interactions became routine, markets such as sports, tourism, and culture & arts came to a standstill. However, the finished car market experienced a new turning point due to COVID-19. The value of cars was re-evaluated not just as simple means of transportation but as personalized spaces. Naturally, sales of premium cars and sport utility vehicles (SUVs) began to surge, and parts manufacturers are enjoying a rare boom.

The first impression received during a recent visit to Hyundai Wia Changwon Plant 2 in Seongsan-gu, Changwon, Gyeongnam, was that of a 'duck on a lake.' Although it seemed to be leisurely floating on the lake surface, in reality, like a duck paddling tirelessly underwater, Changwon Plant 2 is 100% automated in processing and 75% automated in assembly. It appeared quiet on the surface but was actually operating at full capacity due to the influx of orders.

Changwon Plant 2 is a factory that produces drivetrain parts such as the rear-wheel-based electronic all-wheel-drive system (ATC) and electronic limited-slip differential (e-LSD), which Hyundai Wia developed first in Korea. The ATC and e-LSD are devices that actively distribute driving force according to road conditions and driving environments. The ATC transfers driving force from the rear wheels to the front, while the e-LSD controls the left and right wheels. The ATC produced at Hyundai Wia Plant 2 is applied to Genesis G70, GV70, Kia Stinger, and the e-LSD is used in premium and high-performance vehicles such as Genesis GV70, GV80, Hyundai Motor Company i30N, and VelosterN.

Due to the high space utilization characteristic of rear-wheel vehicles, premium cars and recreational vehicles (RVs) are popular in rear-wheel models. Moreover, as COVID-19 became widespread last year, the value of cars as personalized spaces was reappraised, and the production volume of ATC and e-LSD produced at Changwon Plant 2 has been increasing daily. In fact, Genesis, Hyundai Motor Company's first premium brand, sold only 530 units in its launch year of 2015, but sales surged to 128,365 units last year, an increase of about 24,000%. Among the sales of the new G80 and GV80 last year, 67% and 85%, respectively, were all-wheel-drive models.

Building on this, the production volume of e-LSD was about 3,000 units in 2017 but surged to 49,000 units last year after being installed in the GV70. This year, the production target is 52,000 units. Although ATC production dropped to about 24,000 units last year due to production disruptions caused by COVID-19, this year the goal is to produce 73,000 units, nearly three times more.

A Hyundai Wia official said, "Since the second half of last year, as the COVID-19 situation eased and consumer sentiment revived, the factory's operating rate has gradually increased." He added, "About 150 employees work at Changwon Plant 2, but some workers are absent due to COVID-19 vaccinations, so even managers are being deployed to work."

As Genesis expands its market to Europe and China, ATC and e-LSD are becoming Hyundai Wia's 'cash cow' products. Although the sales proportion of these two products in the parts sector is only about 15%, their growth potential is expected. Hwang Yun-mok, Executive Director of Hyundai Wia Vehicle Parts Production, said, "Including the old Kia Gikong era, the experience accumulated over the past 50 years through various trials and errors related to drivetrain parts is Hyundai Wia's greatest strength." He added, "As exports to other finished car brands become visible and line operating rates reach their maximum from next year, ATC and e-LSD will become full-fledged cash cow products for the company."