[Hyundai's 40 Years in the U.S.] "We Grew with Hyundai"... Daehan Solution's Rise as a Global Parts Supplier

Interview with Daehan Solution Vice Chairman Kwon Chungho
Forming ties with Hyundai Motor in the late 1990s
Entering the U.S. market together in 2003
Rising as a global parts supplier sought after by GM, Ford, Tesla and others

Editor's NoteThis year marks the 40th anniversary of Hyundai Motor Company's entry into the United States. Its advance into the U.S. became the solid foundation on which Hyundai Motor Group grew into a truly "global top-three automaker." We look back on the footsteps of Hyundai Motor, which has moved beyond its past reputation for low prices but poor quality to establish itself as a frontrunner leading the era of future mobility.

"The turning point came in 2003, when we entered Alabama in the United States together with Hyundai Motor Company."

On February 6 at Daehan Solution's headquarters in Namdong-gu, Incheon, Kwon Chungho, vice chairman of Daehan Solution, told The Asia Business Daily that the decisive opportunity for the company to leap forward as a global enterprise was its entry into the U.S. market in 2003. Vice Chairman Kwon explained, "After entering the United States with Hyundai Motor, we established production and quality control systems in the local market that met global standards, which enabled us to grow into a global automotive parts company."

Kwon Chungho, vice chairman of Daehan Solution, is being interviewed by The Asia Business Daily. Yoon Dongju, Reporter

Daehan Solution traces its roots back to Daehan Chemical Industry, founded in 1982 by its founder and chairman, Kwon Hoihyun. At that time, there was a strong push among domestic automakers to localize components. Daehan Solution succeeded in developing polyurethane insulation products for the first time in Korea and began focusing on automotive parts development by supplying its products to Daewoo Motor.

Daehan Solution's main products are interior materials that prevent external noise and engine noise from entering the cabin while the vehicle is in motion. Its products are used in most Hyundai Motor and Kia models, including the G90, the top-of-the-line model of Genesis. In addition, the company supplies parts to the "Big Three" in the North American market-Ford, General Motors, and Stellantis-as well as to electric vehicle brands such as Tesla and Lucid.

The reason Daehan Solution, which had previously focused only on the domestic market, was able to grow into a global company lies in its encounter with Hyundai Motor. When its key customer Kia Motors was acquired by Hyundai Motor in 1999, Daehan Solution naturally began supplying parts to Hyundai Motor. Then, in 2003, it entered the U.S. together with Hyundai Motor and continued to build on the partnership. In the process, it gained Hyundai Motor's know-how and now operates local plants in Georgia, Michigan, Nevada, and Monterrey in the United States.

Vice Chairman Kwon said, "We operate a just-in-sequence supply system that is fully integrated with the production schedules of Hyundai Motor and Kia plants," adding, "In effect, we operate as if we were part of Hyundai Motor's factories, minimizing inventory costs and responding in real time to changes on the production line. Learning the processes of Hyundai Motor and Kia has been a key factor in strengthening our competitiveness in the local market."

Kwon Chungho, vice chairman of Daehan Solution, is explaining the NVH installed in an actual vehicle to a reporter for this paper. Photo by Yoon Dongju

The growth of Hyundai Motor, its core customer, has been directly linked to the growth of Daehan Solution. Its annual sales, which stood at 73.5 billion won in 2002, increased more than 18-fold to 1.3 trillion won last year. This year, sales are expected to exceed 1.4 trillion won.

Vice Chairman Kwon said, "As Hyundai Motor and Kia have grown in the U.S. market, Daehan Solution has grown alongside them. In 2021, our North American subsidiary's sales surpassed our domestic sales," and added, "As Hyundai Motor's brand status has risen, a global atmosphere has formed in which our technological capabilities and supply stability are recognized solely on the strength of the title 'Hyundai Motor's first-tier supplier' in the global finished vehicle market."

In preparation for the era of autonomous driving, Daehan Solution is jointly researching passenger-safety-centered technologies and the advancement of AI-based production processes with Hyundai Motor, while expanding the scope of cooperation in line with changes at its customers, including robotics.

Vice Chairman Kwon said, "Although we are a partner company, we are constantly thinking about how we, as a partner to Hyundai Motor, can help ensure the success of our customer, Hyundai Motor," and added, "We are not content with what we are doing now and are making various efforts to keep pace with Hyundai Motor's changes, including in robotics."