KOTRA knocks on Ford, Stellantis doors as tariffs squeeze auto parts exports

South Korea's auto parts industry is navigating a rapidly shifting export landscape as tariff pressures, the transition to electric vehicles and growing demands for North American localization converge. KOTRA has joined forces with Hyundai Motor and Kia to help domestic parts makers break into global automakers' supply chains.

The Korea Trade-Investment Promotion Agency (KOTRA) announced Sunday that it co-hosted the "Ford-Korea Parts Supplier Cooperation Day" and the "Stellantis Innovation Tech Show" with Hyundai Motor and Kia over three days beginning July 14 (local time) in Detroit.

The events marked the first joint initiative since KOTRA, Hyundai Motor and Kia signed an MOU on July 8 to cooperate on supporting Korean auto parts companies' overseas expansion. The two sides aim to help domestic parts suppliers — including those already in Hyundai Motor and Kia's vendor networks — gain entry into the supply chains of global automakers.

Fifty-two Korean auto parts companies participated in the events, 44 of which are suppliers to Hyundai Motor or Kia. The participating firms met with procurement and technology officials from Ford and Stellantis at their respective headquarters to present their products and capabilities.

Auto parts exports have been on a downward trend. South Korea's auto parts exports totaled $21.1 billion last year, down 6.0 percent from the previous year, and the preliminary figure for the first half of this year came to $10.03 billion, a further decline of 6.3 percent. Analysts point to US tariffs, a slowdown in the pace of EV adoption and automakers' push to expand local procurement as simultaneous headwinds.

Parts makers are also moving to broaden their business beyond electrification components into areas such as thermal management, lightweighting and software-defined parts. As automakers demand both supply chain stability and cost reduction, technology-driven sales pitches are becoming more important than simple price competition.

The consulting sessions were built around actual demand from North American automakers. KOTRA's Detroit trade office identified 37 parts categories and supplier requirements from Ford and Stellantis earlier this year, then used that information to select Korean participants.

A Ford global procurement official said companies with production facilities within the United States-Mexico-Canada Agreement (USMCA) region would have an advantage. A Stellantis procurement official said the key was cost reduction through innovative technology, emphasizing both technical capability and pricing.

KOTRA said global automakers' criteria for selecting parts suppliers have shifted. Suppliers are now evaluated more heavily on their ability to improve quality and productivity than on price alone, and delivery stability — a factor that gained prominence after the pandemic and the semiconductor supply crunch — has become a major consideration. The preference for suppliers with production bases within North America is also growing stronger.

The events featured procurement policy briefings by Ford and Stellantis, one-on-one exhibition and consulting sessions between Korean parts companies and automaker purchasing managers, and networking meetings. Korean firms directly showcased their products to Ford and Stellantis executives and procurement officials, explaining mass production feasibility and the scope of potential technology applications.

The automakers showed keen interest in assessing the technical capabilities and supply capacity of Korean parts makers. One Ford attendee said the company was aware of Korean suppliers' strong quality and technical standards, and hoped the direct engagement would help verify those capabilities and raise the prospect of cooperation as potential partners.

A Stellantis attendee said the company values innovative technology and solid partnerships that can strengthen supply chain stability, adding that collaboration with Korean parts makers could help identify the technologies needed to drive its five-year strategic plan, "FaSTLAne 2030."

FaSTLAne 2030 is Stellantis's medium- to long-term strategy for 2026 to 2030, centered on customer-focused product innovation and platform standardization, with concentrated investment in core brands and future technologies.

KOTRA plans to build on the Detroit events with additional matchmaking initiatives in the second half of the year, hosting export exhibition and consulting sessions tailored to local automaker demand in Germany, Japan and Brazil.

KOTRA President Kang Gyeong-seong said the Korean auto parts industry is going through a major transformation driven by tariffs, the EV transition and localization pressures, but still possesses outstanding quality and competitiveness. He said KOTRA would use its overseas network to identify demand from global automakers and work with Hyundai Motor, Kia and others to give Korean parts companies every possible support in expanding their presence in global automaker supply chains.