Hyundai Wia Holds Talks with Renault, Nissan, VW

Three of the world's largest automakers, Renault, Nissan and Volkswagen, are now holding talks with Hyundai Wia, the second largest auto parts manufacturer in South Korea, for a potential supply deal. The news was confirmed by Chief Executive Lheem Heung-soo for Dow Jones Newswires, while also adding that the parts makers intends to become a more Hyundai-dependent company by reducing the stake the South Korean carmaker owns from 78.79 percent to 65 percent by 2020.

"We will achieve the 2020 sales target by diversifying our businesses into wind-power generation, electric vehicle parts and recycling," Lheem said in a statement. "We expect to achieve KRW14 trillion (of sales) through current businesses and the rest through the new businesses, which also include producing in-wheel drive motors and decelerators."

Hyundai Wia is already working with some top carmakers in the industry, including Hyundai and Kia, but also with General Motors which uses parts produced by the Korean firm for vehicles sold in the Asian markets.

The company, which is now focusing on the production of automotive modules, engines and machine tools, intends to expand its business in foreign markets, with sources familiar with the matter hinting that possible plants outside Korea are also possible. Hyundai Wia already operates facilities in India and China, but other locations, such as the United States, are reportedly under consideration.

Europe is also a possible target for the parts manufacturer and, in case the company decides to go further with this plan, it could open a factory in Poland, Lheem said. But, for the time being, "building a plant in the U.S. and an additional factory in China is not under consideration for now."