REMICH, Luxembourg—SaarGummi Group has reached a technical agreement with South Korea-based AIA Corp.
The firm said in a news release that its partnership with AIA generates high synergies for both companies. SaarGummi said AIA has a strong presence in the region and has established relationships with Hyundai and Kia, two key automotive OEMs.
SaarGummi does not currently have a plant in South Korea, just a sales office in Busan. The firm operates nine facilities in the Asia-Pacific region—six manufacturing sites and a regional office/technical center in China and two manufacturing sites in India.
The firm identified Hyundai and Kia as two of the most important OEMs in the region, adding that production volume is increasing overall. SaarGummi said China is the biggest automotive market worldwide and India is projected to become the fourth largest by 2025. Light vehicle sales are projected to increase to 7.2 million per year during that span, up from 4.1 million, according to the firm.
OEMs such as Maruti-Suzuki, Tata, Mahindra, Renault-Nissan, Hyundai and Kia are driving this growth, SaarGummi said.
"As a global player we are always looking for potential synergies and as market surveys show, the (South) Korean automotive market is growing steadily," a company spokeswoman said in an email. "AIA Corp. is a regional supplier, concentrated on the needs of (South) Korean customers and they already have a close cooperation with Hyundai and Kia for years."
She added that both companies will learn from exchanging technical expertise. AIA produces anti-vibration systems, bumpers, and static and dynamic weatherstrips. AIA currently holds a 12-percent market share of weatherstrips for both Hyundai and Kia.
The firm employs about 350 at its South Korean manufacturing site—which also includes a mixing facility and a technical center. SaarGummi said AIA generated about $263 million in sales for 2016.
"We are sure that the technical agreement with AIA will help us to establish SaarGummi automotive innovations on the increasing (South) Korean automotive market," David Lettin, managing director of SaarGummi technologies International GmbH, said in a statement. He added that the firm is considering a joint venture with AIA.
"To guarantee always the best possible service for our customers, we need to be close to their production sites," the spokeswoman said. "We extend our global footprint continuously. A joint venture offers other opportunities/possibilities than a mere technical cooperation agreement."
Based in Remich, SaarGummi operates 23 locations in the European, Americas and Asia-Pacific regions with about 5,700 employees. The firm manufactures sealing systems—including static and dynamic seals—for global automotive OEMs.