Seoul/Tokyo: Hyundai Motor's steady climb in the global auto industry has nurtured a strong base of local suppliers, and South Korean parts makers could be looking at more business overseas after adding premium car brand BMW to their list of clients.
BMW, the world's top maker of premium cars, said on Friday it now has contracts with 12 South Korean suppliers, as it announced a fresh $170 million (Dh623 million) brake deal with Mando Corp.
News that the much admired marquee brand was sourcing so heavily in Korea pushed up shares in parts makers, which have a relatively high presence overseas compared with their local peers.
"This is the first time that a luxury car brand has made it public that it will use Korean parts in its cars," said Ko Tae-bong, an analyst at IBK Investment & Securities.
"We expect this to have a ripple effect on other automakers such as Volkswagen," he added.
Among other suppliers on BMW's list are Hyundai Mobis, Hankook Tire, Kumho Tire and SB LiMotive, a battery joint venture between Samsung SDI and Germany's Bosch, BMW's purchasing chief, Herbert Diess, told reporters in Seoul on Friday.
"The success of Korean car makers has spurred automakers to turn their attention to their suppliers," said Kang Sang-min, Hanhwa Securities analyst.
