Turning Profitable through Cost Management and Production Structure Innovation
Expanding Development of Eco-Friendly Vehicle Parts
Countdown to Mass Production of SBW Parts
[Asia Economy Reporter Jang Hyowon] “Orient Jeonggong will accelerate its steps toward the future automotive market, starting with a turnaround to profitability.”
On the 20th, Park Youngdong, CEO of Orient Jeonggong, said this in a written interview with Asia Economy. Orient Jeonggong is a first-tier supplier to Hyundai and Kia Motors, with its headquarters (Plant 1) and Plants 2 and 3 production facilities located in Gumi, and distribution centers in Cheonan and Ulsan.
Orient Jeonggong succeeded in turning a profit with a separate basis cumulative sales of 38.9 billion KRW and operating profit of 800 million KRW in the first half of the year, followed by cumulative sales of 57.5 billion KRW and operating profit of 1.3 billion KRW in the third quarter, recording a 67% increase compared to the same period last year.
Having succeeded in business normalization, Orient Jeonggong has established five strategies targeting the future automotive market: ▲ development of autonomous driving vehicle parts representing the 4th industrial revolution ▲ development of eco-friendly vehicle parts in response to the global eco-friendly trend ▲ development of new material parts in line with the issue of vehicle lightweighting ▲ global market expansion utilizing the overseas base Orient Vina ▲ synergy with affiliates possessing technological capabilities.
For autonomous driving-related parts, mass production preparation of SBW parts, an electronic control device that controls vehicles by electrical signals, has been completed. SBW is an essential part related to autonomous driving and automatic parking, and its application is currently expanding in commercial vehicles.
CEO Park said, “We currently have mass production facilities with a capacity of 500,000 units and are conducting trial production, with mass production starting early next year,” adding, “It is expected that the order volume will expand to about 4 million units by the year after next.” He also added, “We have started development aiming for mass production in 2023 of radar and lidar-related parts, which can be called the eyes of autonomous vehicles.”
For eco-friendly vehicle parts, EV vehicle brackets are currently in mass production, and from next year, housings for EV vehicle reducers will also be mass-produced. In line with the essential issue of improving fuel efficiency in eco-friendly vehicles, high-efficiency multi-stage reducers that can replace existing reducers are being developed in advance in collaboration with venture companies.
Regarding hydrogen fuel cell vehicles, prototype production of parts related to hydrogen air compressors has begun, targeting mass production in 2023. Development is focused on producing MEA (Membrane Electrode Assembly) separators, a core component of hydrogen fuel cell stacks, using a more efficient method than the current process.
CEO Park emphasized, “Many automakers are focusing on improving energy efficiency and vehicle lightweighting to enhance fuel efficiency in eco-friendly vehicles. Orient Jeonggong has also set future strategies focusing on energy efficiency improvement and lightweighting and is developing new material parts for that purpose.”
As part of new material parts development, Orient Jeonggong is promoting the development of battery parts using high heat dissipation and high-strength aluminum new materials. Orient Jeonggong is a company with strengths in aluminum material parts, having developed automotive parts applying a high vacuum aluminum die-casting process for the first time in Korea in 2013, and the expansion of production of existing aluminum parts has played a key role in sales growth this year.
He said, “We are in the process of transferring technology with a research institute that possesses technology for high heat dissipation and high-strength aluminum new materials,” adding, “We are also on the verge of signing an MOU with a material company capable of producing this material.”
He further explained, “This material can be applied not only to battery parts but also to various parts such as chassis. We will start product development within the first half of next year and do our best to achieve quick results. Also, plastic is an important material in vehicle lightweighting, and eco-friendly eco-plastic materials that do not emit harmful substances when discarded and can naturally decompose under certain conditions are also being developed through Orient Plastic.”
Meanwhile, Orient Jeonggong is continuously conducting research and development on automotive parts modularization with Orient Plastic, a plastic injection molding specialist company with over 20 years of technology, and Orient Electronics, which has accumulated over 40 years of technology in the power and electronics fields.
In addition, Orient Jeonggong supplies automotive parts to India, the Czech Republic, and other countries through Orient Vina, established in 2007 to serve as a global hub. Utilizing tariff-free benefits and geographical advantages for entering the Eurasian market, it is promoting facility investments to reduce product costs and improve profitability through global sourcing and to strengthen global production bases and hub functions.
CEO Park emphasized, “Orient Jeonggong plans to maximize profits by preoccupying the eco-friendly future vehicle market through active collaboration with affiliates,” adding, “We will ensure that a future of mutual growth with companies and investors working with Orient Jeonggong comes quickly.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
