It has been found that among the first-tier suppliers supplying parts to Hyundai Motor Company and Kia, the annual sales of small and medium-sized enterprises have surpassed 90 trillion won for the first time in history.
Hyundai Motor Group reported on the 21st that the sales of 237 first-tier small and medium-sized parts suppliers for Hyundai Motor Company and Kia reached 90.297 trillion won last year. It was also noted that when adding the sales of the 2nd and 3rd tier suppliers, which number about 5,000, the total is expected to exceed 100 trillion won.
The sales of first-tier suppliers are more than 12 trillion won higher than Hyundai Motor Company's sales of 78.338 trillion won in 2023. This amounts to approximately 66% of the combined sales of Hyundai Motor Company and Kia, which totaled 136.5537 trillion won.
The sales of these suppliers have significantly increased since the 2000s. As the global market share of Hyundai Motor Company and Kia expanded, their suppliers exhibited rapid growth. The total sales of suppliers last year increased by 326% compared to 21.1837 trillion won in 2001, a change that has occurred over 23 years.
As the scale and solidity of parts suppliers have grown, their contribution to the national economy has also increased. Utilizing the Bank of Korea's input-output table, the estimated economic ripple effects based on supplier sales included a production inducement effect of 237.8 trillion won and a value-added inducement effect of 55.6 trillion won. The employment inducement effect is shown to reach 600,000 people.
The trend of individual suppliers becoming larger is also becoming more pronounced. The average sales per company among these suppliers, which were 73.3 billion won in 2001, surged to 239.1 billion won in 2013 and 381 billion won in 2023. Consequently, the number of suppliers with sales exceeding 100 billion won increased from 62 companies (21%) in 2001 to 160 companies (68%) by 2023.
Also, the number of affiliated companies listed on the Korea Exchange and KOSDAQ market increased from 46 in 2001 to 70 by the end of 2023, and during the same period, the market capitalization rose from 1.5 trillion won to 17.4 trillion won, an increase of 11.6 times.
Financial stability has also improved. The average asset size of corporations among suppliers increased from 50.9 billion won in 2001 to 337.8 billion won in 2023, a growth of 6.6 times, and the average liability ratio dropped from 152% to 110%, a decrease of 42 percentage points.
A representative of Hyundai Motor Group explained, "The growth of suppliers appears to be a result of increased quantities due to the rise in global sales of Hyundai Motor Company and Kia, as well as utilizing their credibility as Hyundai Motor Company and Kia suppliers to increase supply to other overseas automakers, thus creating diverse revenue sources."
He added, "Hyundai Motor Company and Kia operate various and substantial co-growth programs based on the philosophy that 'the growth of suppliers is the source of automotive competitiveness' and long-term partnerships to support the sustainable growth of suppliers."