Korean automotive industry is not a major one, but it is an important cog in the global automotive industry machine.
The automotive parts manufacturer MS Autotech has just become a contract manufacturer for Byton, which was founded in 2017 by Chinese automotive company FMC (Future Mobility Corp) in South Korea. Through its subsidiary Myongshin, MS Autotech will produce more than 50,000 electric cars annually – in a former General Motors factory. Korea’s firmly established electric car supply chain would also no doubt be advantageous to Byton and also its subsidiaries. On the purely fiscal level, Byton’s manufacturing in South Korea would also be an opportunity to escape the tariffs being imposed on made-in-China vehicles exported to the United States. A prudent move, since it still remains unclear how the trade conflict between China and the USA will continue. Byton’s deal with Myongshin in South Korea is particularly opportune at a time when Made-in-China vehicles exported to the United States are currently subject to tariffs, and sales of cars made in South Korea can avoid those tariffs and benefit the trade war. The plant could allow the Chinese parent company FMC to take advantage of South Korea’s free trade deal with the United States and Europe, as well as the country’s electric car supply chain. FMC plans to launch the vehicles in the United States and Europe soon after starting sales in China in 2019.
It will be interesting to see how this fare for the Japanese and the European carmakers who are the major players in the industry.