In the highly competitive market for plastic automotive parts, Sambo A&T combines advanced technology with strong cost competitiveness, without compromising on quality, reinforcing South Korea’s reputation as a leading player in the global automotive supply chain.
This seems to be a perfect moment for Korean suppliers to benefit, on one hand from their own success and on the other from the global supply-chain realignment. Do you agree that now is a good time to explore overseas opportunities, and what possibilities do you see for Korean suppliers?
Yes, overall, I agree with this assessment. Globalization offers a real opportunity for Korean companies. I can share a few illustrative examples. Take Hyundai: in a relatively short time, they grew annual sales from about four million to around eight million vehicles. This remarkable expansion was not achieved through domestic sales alone; the real growth came from their overseas markets.
During that process, some small and medium-sized enterprises (SMEs) grew alongside Hyundai by accompanying them abroad, while others forged their own paths by supplying different original equipment manufacturers (OEMs). Each type of SME developed distinct customer portfolios and business structures. I believe a similar situation exists today.
In the past, the United States and other major markets focused almost exclusively on price and quality competitiveness. However, this has already been raised considerably, so in order to differentiate ourselves, we currently need to focus on stability in all aspects, including supply and operations. These changes in customer needs are creating a demand for finding new suppliers, making us believe that it is time to expand into overseas markets.
Today, when selling into the U.S. market for instance, customers not only look at price but also at the reliability of supply and delivery. For that reason, we are actively considering overseas expansion, although in a different way from the past. In the past, supplier overseas growth was driven by accompanying Hyundai Motor Group in its global expansion. Now, we need to consider overseas expansion, including the potential for business expansion, such as being added to the existing supply chains of other global automakers.
To supply customers steadily in this environment of global supply-chain reorganization, we need not only technological strength but also competitiveness in a wide range of areas. Fortunately, many Korean SMEs, including Sambo A&T, have spent years building both capability and reputation. That accumulated competitiveness positions us well to enter global markets and to support a variety of OEM products worldwide.
Many Korean suppliers are turning to factory automation and smart-factory systems to meet those demands. Sambo A&T is well known for its automation, robotic painting and assembly, true first-in-first-out (FIFO) logistics, and digital control of the entire supply chain. What results have you achieved through these smart-factory investments?
The decisive factor was the strong emphasis placed on smart-factory transformation by our chairman. He created a dedicated department for this purpose and championed the initiative for more than five years. His foresight allowed us to move faster than other competitors.
As for competitiveness, Customers demand price and quality as basic standards, and we are currently in a position between developed countries like the U.S. and Europe, and developing countries such as China and Vietnam. In this environment, price competitiveness is not enough, we have to achieve world-class quality while ensuring competitiveness that exceeds both developed and developing countries. To meet these dual expectations, we have been actively pursuing smart-factory investments, including automation. As a result, it is possible to efficiently manage main production and inspection processes while continuously maintaining high quality.
The fact that we were able to rapidly establish and stably operate automated systems like smart-factory can also be attributed, in part, to Korea’s uniquely fast-moving culture. This was a great help in solving designing and developing a new project in short period while maintaining stability in production and quality.
Your core products such as keysets, door handles, and other plastic automotive components, are extremely price sensitive and face intense competition from both local and international suppliers. How do you view the evolution of this core business, and how do you compete globally against companies with strong localized expertise?
It is true that our products are very price sensitive, and we face particularly strong challenges from emerging suppliers in China and Vietnam. Competition is fierce and, in some segments, oversaturated.
Yet automotive door handles, for example, are far from simple. Although they appear to be simple plastic parts, they are unique in that they are the only plastic moving parts on a vehicle that perform constant mechanical movement. Production involves melting resin, injecting it into precise molds, and cooling it while carefully calculating the inevitable shrinkage that occurs and ensuring that no technical failure occurs in the operation of the door handle. This does not require high-tech science, but it is a part that requires precise and high-level manufacturing capabilities.
Companies without long experience and accumulated know-how risk serious quality issues, such as handles that stick or fail to return to position. Our long track record gives us a natural competitiveness, and creates a high entry barrier that competitors can’t easily follow.
Looking to the medium and long term, I see the market evolving rapidly toward eco-friendly electric vehicles (EVs) around the European market. On the other hand, the U.S. is cautious, but it believes that the market reorganization to electric vehicles (EVs) will be inevitable. Although we have many concerns about how our main products will change in these structural changes, we plan to use our experience and quick response capabilities to gain an edge over other competitors in technology, price, quality, and etc...
When we talk about the shift from internal-combustion engines to EVs, many think mainly about the powertrain. But there are at least three other major trends: a change in materials away from heavy ferrous metals toward plastics, carbon-fiber composites, and aluminium; the rise of gigacasting, in which large vehicle sections are molded as single units; and the entry of new suppliers, such as aerospace plastics specialists into automotive. How is Sambo A&T preparing for these changes?
Let me address these one by one.
First, regarding new materials: we are a plastic specialist, but we don’t produce the raw material directly. However, from the perspective of demanding customers, we are ensuring the innovative materials developed in collaboration with major chemical and material companies meet automotive specification. We also work with universities and research institutes to develop plastics that can be recycled multiple times, ideally five or six, without loss of performance, and continue to make contributions to the sustainability.
Second, on gigacasting: although it is often associated with lightweight steel or aluminium, even if the material is plastic, we have the expertise in large scale molds with structural designs that can produce multiple products simultaneously in single injection. We operate a specialized facility in Korea capable of producing very large molds and complex structural parts, which gives us confidence in adapting to this manufacturing trend.
Third, concerning potential competition from aerospace plastics suppliers: while they possess advanced materials, we believe the challenge is not only in material science but also in precise automotive manufacturing and quality assurance. Our deep, integrated know-how in both areas provides a significant competitive edge.
You mentioned recycling. Many say recycled plastics still suffer from performance and purity limitations. How far has the automotive industry progressed in using recycled materials, and what is Sambo doing in this area?
At present, Thermoplastic resin can be milled and reused, but only up to about two cycles before the material’s properties degrade below automotive standards. Together with universities, we are developing new plastics that can be reused five or six times without sacrificing quality. We are already testing these materials in automotive applications and are seeing promising results.
However, for these recycled plastics to be mass produced, it depends on the market environment rather than on technology. For example, if shared mobility expands and cars become communal assets rather than individuals, consumers will be less sensitive to the exterior luxury finishes and it allows more extensive use of recycled materials. Furthermore, autonomous-driving technology reduces accidents, required safety specifications may change, and new materials can be adopted more quickly, which will have a positive impact on the expansion of recycled materials.
Currently, we are focusing on exterior garnish parts as our first commercial application. Development is progressing well, and we expect to bring these materials to market in the near future.
Turning back to the EV transition, we’ve seen the rise of entirely new OEMs and the strengthening of others. For suppliers, diversification of OEM customers has become critical. Do you agree that it is now more important than ever to diversify your client base beyond a few major automakers?
Diversification strategy depends on the product. Large components such as bumpers involve high logistics and tooling costs, making broad diversification more difficult. Smaller components, on the other hand, lend themselves more readily to a wider range of customers.
Historically, Sambo A&T has supplied Hyundai and Kia primarily from our domestic base, and later supported their overseas operations. Now, as we plan production facilities in the United States and Europe, we aim to broaden our OEM relationships, especially for items like general and flush handles where diversification is more feasible.
In targeting the U.S. and European markets, will you collaborate directly with major OEMs such as Volkswagen or Ford, or work through tier-one suppliers?
We already supply GM in the United States and Volkswagen and Škoda in the Czech Republic. Our immediate focus in America and Europe is to support Hyundai and Kia as they localize production, but as we establish a stronger presence, we plan to expand direct business with other global OEMs as well.
Key Set
In 2024, Sambo A&T expects revenue of about 126 million U.S. dollars, with roughly two-thirds from handles and one-third from keysets. How do you foresee your portfolio and revenues evolving in the short and long term?
I see two main growth drivers over the next three to five years.
First is localization. By helping Hyundai and Kia establish local supply chains in the United States and Europe, we can showcase our production lines to global OEMs, gain recognition, and eventually build stable direct business with them.
Second is product evolution. Handles will remain essential as long as there are cars, but their designs and mechanisms will continue to change. Even in the past two or three years we have seen dramatic shifts, such as the spread of full pop-up handles. Our strength lies in rapidly designing and producing new models that meet changing customer demands and cost requirements.
These two growth engines, localization and product innovation, will underpin both our short-term expansion and our long-term sustainability.
At CES in Las Vegas this year, your group unveiled a new hydrogen-powered urban air-mobility (UAM) vehicle that drew significant attention. It was reported that Sambo A&T is spearheading this project. Why was your company chosen to lead it, and what is your vision for commercialization?
The idea originated less from profit motives than from social value. One day I watched an ambulance delayed in traffic and imagined the potential of drones to transport urgent medical items like donor organs. Around the same time, I became deeply interested in hydrogen energy and began exploring how it could power drones.
At CES, I spoke with many experts who confirmed the challenges of using hydrogen in this way, but the concept of a hydrogen-powered hybrid drone took hold. That was the spark for our UAM project.
In terms of progress, the first human-capable drone was unveiled in October of last year, and a new version followed this year. We have already received approval from Korea’s Ministry of Transportation to conduct pilot operations in designated areas.
Nevertheless, full commercialization involves complex considerations, insurance, safety certification, and integration into public airspace. Because this technology directly affects human life, it must be approached with great care. While my initial estimate was about ten years, the strong support we are receiving from both the Korean government and international partners leads me to believe that commercialization within five to ten years is achievable.
Finally, if we meet again in 2036 for Sambo A&T’s 40th anniversary, what would you like to achieve by then?
By then, I hope to share the results of ambitious new initiatives like UAM, AMR and advanced sustainable materials, projects that today are still in their early stages. I expect that we will not only have achieved significant growth and technological breakthroughs but will also be preparing to embark on the next generation of innovations.
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