Subsidiary Merger

Korea’s leading automobile parts supplier Mando announced on February 21 that it will merge its two Indian subsidiaries Mando India Steering (MIS) and Mando India Limited (MIL) to a new company Mando Automotive India Limited as of April 1, in a bid to more actively explore the Indian automobile parts market.

According to the merger agreement signed on February 20 (local time), MIL will be absorbed by MIS. Mando will take substantial responsibility for management of the new company with 71% ownership.

Through the merger, Mando plans to build the entire lineup of all products within one business entity and focus its marketing capacity on local makers like Tata and Mahindra as well as the existing clients like Hyundai Motor, GM and Nissan. The company expects to enhance the operational efficiency through integration of organizations, which will lead to cost-saving effect and increase in sales and profitability. Last year, MIS and MIL recorded a total of 12 billion rupees in sales (about 240 billion won), a 12% rise year-on-year. Now Mando aims to make the new company grow more than doubled within five years.

Mando said on the same day that it has recently signed a 176-billion-won contract to supply brake systems to Italy’s Fiat. Under the contract, Fiat vehicles being produced in Europe and Brazil from 2014 will have Mando brakes. Besides, Mando has also been selected as a supplier of core parts by other European car makers such as BMW and Volkswagen, since it began with PSA (Peugeot-Citroen) and Renault in 2009.

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