MOBIS has completed a large logistics center in Dubai, United Arab Emirates, and embarked on the export expansion of its genuine auto parts. The center, built with an investment of US$12 million, is designed to take the role of MOBIS' logistics base covering the Middle East and African regions.
On October 29, a ceremony was held marking the completion of the Dubai logistics center, named "HMME" (Hyundai MOBIS Middle East Establishment). About 300 related foreign and Korean officials and business representatives attended the ceremony, including UAE's Crown Prince Mohamed Maktum, Minister Hasser Maktum and MOBIS Vice President Sung-Do Park.
HMME is a mammoth logistics center with 10,000 pyong of floor space (one pyong=about 3.3 square meters) built on an 18,000 pyong site.
With the completion of this center, MOBIS has set up a worldwide parts supply network, now having three overseas logistics bases in addition to those in Europe (HMEP) and Shanghai, China (HMS), including the existing 14 logistics centers of Hyundai and Kia Motor in North America and Europe.
MOBIS has up to now supplied auto parts to the Middle East and Africa directly from Korea. The company is now able to reduce logistics costs remarkably and supply auto parts more quickly and stably thanks to the Dubai center. As a result, the center is also expected to bring about an annual 7-8% sales expansion for Hyundai and Kia cars as well as their enhanced competitiveness.
One of the mail reasons for MOBIS to build the large-scale logistics center in Dubai was to help the company cope with an ever-soaring demand for automobiles, as the number of Hyundai and Kia cars operating in the covered regions is expected to exceed 800,000 in 2005 from 600,000 in 2002. Furthermore, Dubai is rapidly emerging as a core logistics base where customs duties are exempted, logistics infrastructure such as roads and port facilities are well prepared, and world-renowned automobile firms including Daimler-Chrysler and Mitsubishi, etc. are already operating their logistics centers.
The Dubai logistics center plans to supply about 80,000 kinds of parts items to 26 agencies in the Middle East and Africa. The characteristics of the center include a state of-the-art "demand forecast and analysis system" introduced for systematic and scientific warehouse management and independent operation of a parts information site, DCS (Data Communication System)-- optimum elements for customer satisfaction.
MOBIS expects that this center will realize about US$40 million in annual sales next year, and about US$60 million by 2005.
MOBIS Vice President Park Sung-Do said, "compared with the logistics centers of Daimler-Chrysler and Mitsubishi, etc. were built to support a 300,000-500,000 operating car base, MOBIS' Dubai logistics center has been established on a scale of about 700,000 unts." Park added that as a result, the MOBIS center will create an economic ripple effect such as recruitment of local manpower, etc., and contribute greatly to the economy in the region.
To maximize customer satisfaction through a more systematic and rapid global parts supply network, MOBIS also plans to expand the construction of its logistics bases further. For this, the company will also acquire KMD, a local corporation of Kia Motor in Europe, by the end of this year, and operate it independently from next year, while actively studying ways to build logistics outposts covering Central and South America as well.