South Korean car parts are of high quality but suffer from weak price competitiveness, a poll showed Tuesday.
The survey of 87 corporate buyers attending this year’s Automotive Aftermarket Product Expo (AAPEX) in the United States found that they gave locally made parts 4.6 points out of a possible 5 in quality, but numbers fell to 3.2 points in price and 2.7 in terms of payment. Locally made products also got 3.3 points in design.
According to the survey by the state-run Korea Trade-Investment Promotion Agency (KOTRA), 87 percent of buyers at APPEX said they purchased South Korean-made parts and components because of their superior quality.
The findings showed that of buyers who bought South Korean parts, 35 percent cited steep prices as an obstacle, with 48 percent saying they would opt to purchase more products if prices go down. Buyers predominantly said China is South Korea’s largest competitor in the car parts industry.
Among buyers that do not purchase South Korean car parts at present, 43 percent said they have stayed away because of the price.
Related to the poll, KOTRA said South Korean car parts makers need to cut production costs and try to differentiate themselves from Chinese rivals, which are able to sell products 20-30 percent cheaper.
It added that South Korean companies need to focus more on replacement equipment markets that make up 20 percent of the $306.1 billion car parts sector in the world‘s largest economy.
“Local parts companies tend to concentrate on becoming original equipment suppliers for GM and Ford, yet they need to realize the potential in other fields,” the agency said.
It said this transition in mindset is important because car parts exports to the U.S. reached around $6 billion in 2013, up 20 percent from $5 billion tallied in 2011. It stressed with large parts distributors, such as AutoZone, showing interest in South Korean parts, local companies need to move rapidly to expand their market presence. (Yonhap)