[Net Zero 1st Street] The Future of Hyundai Mobis, Czech Electrification Plant

Nosovice Module Factory, Moshnov Lamp and Electrification Factory Visit...
Core 3 Modules Supplied via Tunnel Conveyor Belt... Reduced Time and Transportation Costs
Battery Systems Produced on First Overseas Electrification Line Delivered in Real-Time to Hyundai Motor Czech Plant Kona EV

[Nosovice·Mosnov (Czech Republic) = Asia Economy Reporter Kim Hyewon] "Do you see the long tunnel above your head? Parts automatically pass through that tunnel. There's no need to load them onto trucks one by one. It plays a big role in reducing logistics costs and improving productivity."

This was said by Production Manager Lee Chang-gi during a tour of Hyundai Motor's Czech plant, but he was not referring to Hyundai Motor's equipment. He was explaining Hyundai Mobis's tunnel conveyor belt system. Parts made at the Hyundai Mobis module factory attached to the Hyundai Motor Czech production site are transported directly to the assembly process via a conveyor inside a tunnel over 100 meters long. The Hyundai Mobis module factory, which we visited in mid-November last year after stopping by the Hyundai Motor Czech plant, is famous for being the first in the world to apply this new technology. Kang Sang-won, head of Hyundai Mobis's Czech branch, whom we met there, said, "By supplying modules through the tunnel conveyor, we not only reduced the finished car production time but also cut transportation costs (logistics and labor costs) amounting to tens of billions of won annually, which helped enhance the competitiveness of Hyundai Motor's Czech plant."

◆The source of competitiveness that attracts global customers is ‘modularization’= Hyundai Mobis is an indispensable entity when Hyundai Motor or Kia builds a factory. It is no longer a simple parts supplier of the past. Without the core modules made by Hyundai Mobis, Hyundai Motor and Kia cannot exist. The reason Hyundai Mobis's status within Hyundai Motor Group has changed dramatically lies in ‘modularization.’ Simply put, a module is a large assembly unit combining about 30,000 individual automotive parts. It is a production method that groups small parts into six or seven large chunks such as front and rear chassis supporting the body and powertrain, or the driver's seat (cockpit). Hyundai Mobis took its first step in supplying chassis modules with the Hyundai Trajet in 1999. Then, in 2000, it produced the driver's seat module, and in 2003, the front-end module, growing early into a leading modularization company among global automotive parts firms.

The Hyundai Mobis Czech module factory, the second production base established in Eastern Europe following Kia's Slovakia plant, supplied all three core modules (front and rear chassis, driver's seat, and front-end) for the European strategic models Tucson, i30, and Kona EV produced at Hyundai Motor's Czech plant. Since it operates on a Just-In-Sequence (JIS) production system tailored to customer orders, the factory was busy assembling parts to meet the overflowing workload of Hyundai Motor's Czech plant. The units per hour (UPH) is 57, the same as Hyundai Motor's Czech plant. At the front chassis module process, after workers attached as many as 104 large and small parts, the vehicle's underbody frame was quickly assembled. Kang, the branch head, said, "We set this year's production target at about 320,000 units," adding, "We are paying special attention to inventory management, increasing stock due to the shortage of automotive semiconductors." This figure exceeds the factory's production capacity of 300,000 units. He also explained that the proportion of female employees is 50-60% due to the delicate processes involved.

Local employees are assembling cockpit (driver's seat) modules at Hyundai Mobis' module plant in the Czech Republic.

◆‘Electrification’ is Hyundai Mobis's future= If modularization is Hyundai Mobis's present, electrification is its future. The Hyundai Mobis Mosnov plant, reached after a 30-minute drive from Nosovice, serves as a strategic base for mass-producing lamps and batteries for electric vehicles. This is the first time Hyundai Mobis has opened this plant to the media. The battery system (BSA) produced here is installed in real-time on the Kona EV produced at Hyundai Motor's Czech plant. As Hyundai Motor and Kia produce more and diverse electric vehicles at their European plants in the future, the role of this plant will inevitably grow. Currently, among Hyundai Mobis's overseas plants, only the Czech Republic and China operate battery lines for electrified vehicles.

Before visiting the electrification line located on the second floor, we toured the busy lamp production process, thanks to the queue of global customers. The head and rear lamps made by Hyundai Mobis receive love calls not only from Hyundai Motor and Kia but also from global automakers such as Arrival, Stellantis, and ?koda. It is unusual in the highly technical European automotive market for a group company to supply key parts to other companies. The Mosnov plant set production plans this year at 660,000 headlamps and 600,000 rear lamps. Due to the flood of orders, the target was raised by 60,000 units compared to the previous year. Starting with a line equipped with four injection molding machines, the processes from surface treatment to assembly were similar to other plants. Space reserved for additional injection molding machines this year was also noticeable.

Next, we visited the new electrification line at the Mosnov plant, which was completely different from previous Hyundai Mobis plants, with strict security management, temperature control, and even a water tank prepared for emergencies. Hyundai Mobis's Czech electrification line began mass production in the first half of last year. Upon entering the second floor, battery cells delivered from SK On (formerly SK Innovation) in Hungary were stacked in storage. Based on these cells, the final product is created only after perfectly completing a total of 46 complex processes from module to pack to system assembly. Most processes are automated to protect battery cells from external shocks. Kang, the branch head, explained, "The Mosnov plant has land available for expansion equal to the size of the existing parts factory," meaning "we can flexibly respond to customer orders."

Hyundai Mobis's electrification business is considered a key business that will carry the company's future in the era of eco-friendly vehicles, not only in Europe, the ‘number one net-zero (carbon neutrality) zone’ but also globally. Recent results prove this. Hyundai Mobis's electrification division sales exceeded the 1 trillion won mark for the first time in Q3 2020 and have increased for five consecutive quarters through Q3 last year. The cumulative sales from Q1 to Q3 last year surpassed 4 trillion won, and the annual sales are estimated to have easily exceeded 5 trillion won.

A view of the Hyundai Mobis lamp and electrification factory located in Mosnov, Czech Republic. Hyundai Mobis has only two overseas factories producing battery systems, in the Czech Republic and China.

Nosovice·Mosnov (Czech Republic) = Reporter Kim Hyewon