Honda opens auto parts procurement department in Korea, Japanese media say rare

According to a report from Japan’s Sankei Shimbun on May 22, Honda Motor Co., Ltd. set up an auto parts procurement department in South Korea in April 2013. Honda had previously set up a supply procurement department in countries with production bases such as China and the United States. The practice of setting up a purchasing department in a country where there is no production base is quite rare.

　　 'Sankei Shimbun' stated that compared with parts produced in Japan, parts of Korean manufacturers have a price advantage, which can be about 20% to 30% cheaper. As South Korea's Hyundai Motor continues to enter the world market, South Korean auto parts manufacturers have shown confidence that is not inferior to those of other countries. Based on this, Honda hopes to increase its cost competitiveness by setting up a purchasing department to increase the efficiency of parts supply.

　　 According to reports, Honda set up a purchasing department in South Korea in April 2013. Although some cars used Korean parts in the past, they only had contact with Korean parts manufacturers through parts distribution conferences or through the Internet. Regarding the establishment of the purchasing department in South Korea this time, Honda's senior officials revealed to reporters: Because Korean parts manufacturers basically do not have offices in Japan, it is difficult to find excellent parts manufacturers. At the same time, Honda also said that by setting up a purchasing department in South Korea, it can directly select parts and then place orders directly, which can improve quality and obtain cost competitiveness.

　　Honda is not the only one using Korean parts among Japanese automakers. As early as 2009, Toyota began to use Korean parts. Nissan also started sending Korean parts directly to its Kyushu plant in March this year, which can reduce logistics costs and shorten delivery time.

　　 On the other hand, Korean parts manufacturers are also accelerating their exports to Japan. South Korea's largest parts manufacturer under Hyundai also opened an office in Tokyo. Although the Korean Won is still appreciating equivalent to the Japanese Yen, and the cost advantage is declining, because Korean parts are equivalent to Japanese parts, they are still very cheap and the quality is not inferior, so Japanese manufacturers use Korean zero The trend of the parts is not expected to stop.