Hyundai Mobis announced on Aug. 18 that it would promote the establishment of two subsidiaries that will each manufacture modules and core parts. The company will hold 100 percent stakes in the two new corporations, but they will be managed independently.

Hyundai Mobis will convert a domestic module factory and a core parts factory, which have thus far been managed by a partner company, into two integrated production affiliates. To this end, the production units of the module factories in Ulsan, Hwaseong, and Gwangju will be merged into the module affiliate, while the production units of airbags, lamps, braking devices, steering wheels and electrification parts factories will be integrated into the parts affiliate.

Hyundai Mobis plans to secure independent sales capabilities through integrated affiliates and promote cooperation with global production bases to expand contract production for global customers.

Hyundai Mobis's announcement sparked speculation that the establishment of the two affiliates may be related to Hyundai Motor Group's move to change its governance structure. The group is the only one among the top 10 business groups in Korea that still has a circular shareholding structure. The group's key subsidiaries,  Hyundai Mobis, Hyundai Motors and Kia Corp., have equity ties under a circular shareholding formula.

In response, Hyundai Mobis explained that its basic business structure remains the same. It added that there will be no change in sales and operating profit as Hyundai Mobis will hold 100 percent stakes in the new subsidiaries.

Hyundai Mobis will hold an extraordinary board meeting in September to discuss the launch of the subsidiaries in November.