KSP Peru 2011
Automotive Part Industry
Cluster
28 March 2012
Jumi Kim
1
KSP Peru 2011
1. Why Automotive Part Industry ? (1)
■ Automotive Industry as complex machinery industry has large industry associations and
pre-and rear-effects than other industry
Real Industry
Steel
Engine parts, body frame crankshaft, axle
Nonferrous
metals
Electronics, battery, altruistic radiator,
engine parts, paint
Electricity
Lighting Equipment, starter motor, wire,
fiber optic, DC motor
Electron
Electronic components, air conditioning
parts, audio products
Petroche
mical
Paint, Oil, bumpers, crash pad,
steering wheel
Machinery
Production equipment, pumps, machine
parts
Rubber
Dustproof rubber belting, tires
Textile,
paper
Interior, seats, safety belts, air cleaner,
oil filter
Energy
Fuel, heat treatment
Glass
Windows, mirrors, headlights
Wood
Truck Charger
Pre Industry
Sales
Mainten Car sales, maintenance,
parts sales
ance
Car rental and leasing,
Use
Divisio parking, passenger and
freight
n
Automotive
Industry
Fuel
Oil refineries and gas
Sector stations
Financial Insurance, installment
Sector
financing
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KSP Peru 2011
1. Why Automotive Part Industry ? (2)
■ Automotive industry has high technology impact and job creation.
■ Automotive part industry is small business oriented in term of structural characteristics and
mass production, mass-market is a prerequisite for corporate.
Steel
9,672 people, Chemicals/Plastics 34,659 people ∙
Metal Products 5,062 people, Machinery
11,063 people
Electricity/Electron 37,092 people, Glassware
2,108 people
Rubber products 11,002 people, Other 11,532 people
Production
materials
122.2 thousand
people
Auto Sales
Maintenance
Division
Car Sales
60,671 people
selling auto parts and accessories 43,149 people
Automotive repair
126,711 people
230.5 thousand
people
Automobile manufacturing
sector
267.2 thousand people
CBU Automobile manufacturin
g
109,344 people
Auto Parts 157,882 people
Use and
Transportation
Division
809.5 thousand
people
Distributors
related sectors
271.8 thousand
people
Refining disposal
2,151 people
Gas stations
68,084 people
Lubricants Manufacturing
536 people
Driving schools
9,587 people
Financial/ad
11,467 people
Road construction and maintenance 128,501 people
Insurance
31,450 people
Others
10,290 people
Passenger transportation 434,792 people
Toll roads operations
13,523 people
Freight transport
239,419 people
Parking
17,126 people
Undertaking land cargo
14,364 people
Automobile leasing/Salvage 21,062 people
Rectification
3,017 people
Cargo agency
66,221 people
3
Direct and indirect employment :
1.701 million people ('09)
7.2% of total employment (23.506
million people)
KSP Peru 2011
1. Why Automotive Part Industry ? (3)
■ The auto parts demands is relatively high compared to the other South American countries in
terms of two reasons ; First, the average use of cars in Peru is about 14 years. So the most
cars are used cars. Second, most of the vehicles use gasoline or cheap leaded gasoline,
leading to frequent break downs and serious environmental damage.
■ Global big motor companies assemble the car in near country, such as Venezuela, Columbia,
Chile, Brazil already which means locally good position to sell auto part products.
- 10 Big companies such as Ford, GM, VW, Toyota produced 716 thousands cars at Argentine
- In Brazil, 3.5 million cars are produced at average per year.
■ Tacna has geographical position and infra which is good for automotive parts industry.
- Infra : Tacna area is located coastal region and can offer a little industrial infrastructure
such as ZofraTagna. And ports, airports and logistics infrastructure are equipped
partially.
- Geographical : Accessibility is good to Brazil and Bolivia through Inter-oceanic Highway.
Also it is located in the border area with Chile.
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KSP Peru 2011
2. Automotive Industry in South America and Peru (1)
■ There was an oversupply of around 15 million even in the years 2001(72.9%) and 2009
(75.6%), which were years with high sales over production ratio.
■ After the economic crisis, there has been changed in the market : leading emerging market
growth, small and cheap cars / EV market expansion, Eco-friendly car technology
<World automobile industry’s change in production exceeds (Production-sales)>
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KSP Peru 2011
2. Automotive Industry in South America and Peru (2)
■ The status of sales in the main South American countries, there was a decrease in 2009
compared to 2008. However there was an increase of 19.1% compared to 2009 in 2010,
selling 5 million vehicles. In 2009 1.3 million out of 4.2 million cars sold was imported.
■ Vehicle ownership status in the main South American countries, Middle and South America in
total have around 55.8 million vehicles, there being a car for every 8.4 people. Especially in
western South American countries including Peru (Peru, Bolivia, Chile, Ecuador, etc.), has a car
for every 17.74 people
Country
Personal
Peru
Argentina
Bolivia
Brazil
Chile
Columbia
Venezuela
Ecuador
Uruguay
Central and
South America
429,000
6,706,101
217,900
23,612,000
1,816,143
1,018,000
2,639,105
329,184
611,000
297,000
2,248,774
307,500
6,031,000
1,018,496
624,000
1,489,100
440,341
122,500
726,000
8,954,875
525,400
29,643,000
2,834,639
1,642,000
4,128,205
769,525
733,500
40.2
4.5
18.8
6.5
6.0
27.8
6.9
17.7
4.6
Cars per
1000
people
24.9
222.3
53.3
153.0
167.0
36.0
144.4
56.5
218.2
41,091,138
14,723,311
55,814,449
8.4
118.5
Commercial
Capita per
car
Total
6
Population
(thousands)
29,165
40,276
9,863
193,734
16,970
45,660
28,583
13,625
3,361
470,977
KSP Peru 2011
2. Automotive Industry in South America and Peru (3)
■ There is no vehicle production in Peru whereas domestic demand is continuously increasing
except 2009.
< Peru Motor Vehicle Sales By Type >
CVs
Year
Cars
%
Chg.
Total
2001
5,698
6.4
4,287
698
135
5,120
-23.0
10,818
-9.9
2002
5,288
-7.2
5,602
572
232
6,406
25.1
11,694
8.1
2003
5,752
8.8
5,696
757
284
6,737
5.2
12,489
6.8
2004
6,345
10.3
7,722
1,103
581
9,406
39.6
15,751
26.1
2005
9,884
55.8
10,701
1,904
1,212
13,817
46.9
23,701
50.5
2006
13,942
41.1
15,193
3,517
897
19,607
41.9
33,549
41.6
2007
17,793
27.6
25,559
6,911
1,757
34,227
74.6
52,020
55.1
2008
38,755
117.8
42,298
16,869
2,186
61,353
79.3
100,108
92.4
2009
27,719
-28.5
29,639
7,365
2,156
39,160
-36.2
66,879
-33.2
2010
50,910
83.7
54,002
14,729
3,552
72,283
84.6
123,193
84.2
%
Chg.
LCV
Trucks
Buses
* Source : FOURIN 世界自動車統計年刊
7
Sub
Total
%
Chg.
KSP Peru 2011
2. Automotive Industry in South America and Peru (4)
■ The table below represents the status of Peru’s import market. Korea has the biggest market
share in Peru.
< Status of car exports to Peru by the origin (2011. 1~5) >
Origin
January
February
March
April
May
Total
Market share(%)
Korea
3088
2979
3510
3602
3875
17,054
29.51
China
2020
1570
1766
2637
2365
10,358
17.93
Japan
2691
1965
2730
1520
1240
10,146
17.56
Thailand
1317
1026
553
717
1369
4,982
8.62
Mexico
686
781
834
592
982
3,875
6.71
Brazil
515
506
747
727
741
3,236
5.6
India
307
387
634
275
387
1,990
3.44
United
States
205
345
156
380
253
1,339
2.32
Germany
240
151
234
288
200
1,113
1.93
Other
609
781
846
571
873
3689
6.38
Total
11,687
10,491
12010
11309
12285
57,782
100
Source: Peruvian Auto Association (AAP)
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KSP Peru 2011
2. Automotive Industry in South America and Peru (5)
■ The Peruvian auto parts market has a fierce competition between the US, Japan, Brazil, China,
and Germany.
■ In, 2005 the amount of imports of auto parts from the US, Japan, Brazil, Korea, China,
Germany, and other countries sum up to 300 million USD a year.
■ The auto parts demands are high compared to the other South American countries in terms
of two reasons ; First, the average use of cars in Peru is about 14 years. So the most cars are
used cars. Second, most of the vehicles use gasoline or cheap leaded gasoline, leading to
frequent break downs and serious environmental damage.
■ The biggest auto imports were tires and other imports including batteries, filters, brakes,
clutches, etc., especially, H.S 8708 products (cushions, safety belts, brake systems, gear boxes,
drive axles, airbags, and other internals (radiators, mufflers, etc.))
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KSP Peru 2011
3. Automotive industry cluster of Korea(1)
Development stage of Korea Automotive industry
Time
National Goals
Automotive
Industry
Automotive Industry related
plan
1st Five-year plan of
economic development ('62'66)
Construction of
Infrastructure
KD Assembly
Automotive industry development embarked
CBU import ban
2nd Five-year plan of
economic development
('67-‘71)
Construction of
Infrastructure
Early stages of
localization
Development basic plan automotive
industry , promote professional affiliation
3rd Five-year plan of
economic development
(‘72-‘76)
Heavy industrial
development
undertaken
Development stage
of domestic cars
Develop a unique domestic cars, export car, a
large integrated plant construction
4th Five-year plan of
economic development
(‘77-‘81)
Establishing the basis of
advancement of
industrial structure
Preparation stage
of production
system
Take rationalization step of automotive
industry, promote industrialization of export
strategy
5th Five-year plan of
economic development
(‘82-‘86)
Establishing a
comparative advantage
industry
Steps to
establish
export-based
Establish mass production system,
export to the United States,
specialization of international production
6th Five-year plan of
economic development
(‘87-‘91)
Establishing a internal
competitiveness
Bulk export
steps
Production liberalization of all car,
liberalization of imports,
enhance exhaust gas and noise regulations
7th Stage
(‘92-‘97)
Industrial restructuring,
Economic Productivity
Quantitative growth
and development
stage of proprietary
technology
Economies of scale, the world's top five automobile
producers, complete their own technology
development of major critical components
8th Stage
(‘98-)
Globalization and
liberalization
Phase of globalization
and technology
advancement
Restructuring of automotive industry,
entering the domestic market of advanced overseas
manufacturers, globalization of production bases
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KSP Peru 2011
3. Automotive industry cluster of Korea(2)-Ulasn Auto Valley
■ Auto Valley Creation Background
Automotive industry of Ulsan has been developed for 40 years since Hyundai motors built
an assembly plant in 1968 and exported Cortina in November of that year.
Formation of giant auto parts market
Hyundai Motor Ulsan Factory (annual level of 1.5 million cars), Hyundai Mobis Logistics
Center (A/S part for domestic and export of Hyundai and Kia Motors, 1/3 sales of Hyundai
Mobis), Daewoo Glovis (10,000 cars), Ulsan is located near Japan (10.5 milliom cars) and
China (8 million)) are located.
Although the world's largest single automobile manufacturing facility is located in Ulsan.
But most auto parts manufacturers are locted in Pusan, Yangsan, and Gyeonggi Province.
Due to this, parts supplier can't do technical exchanges and information acquisition and has
burden of logistics cost.
For this reason, in 2002, Ulsan Metropolitan City conducted Auto Valley business aiming the
development of global supply base for localization of automotive industry.
Auto Valley business from 2002 to 2007 costing 300 billion dollrs is to auto part cluster from
Buk-gu, the location of Hyundai Motors to Hyomun industrial park, Buk-gu nongso Maegok
local industrial complex Gyeongju.
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KSP Peru 2011
3. Automotive industry cluster of Korea(3)-Ulasn Auto Valley
■ Auto Valley Main Projects
Composition of automotive parts and materials complex
Composition of integrated and specialized complex of auto parts and auto parts-related at a local industrial
complex in Buk-gu, Maegok, Ulsan
Composition of modularity complex
Composition of the complex to promote a modularity, attract of module manufacturers and professional
associated company, professional supplier modular associations, and establish an production system
Establish auto parts innovation center
Support agencies for technical innovation, quality and reliability, start-ups of the auto parts company located
at Ulsan and youngnam area. main job is to develop automotive-related technology, and support
authentication and rating of component testing.
Establish Automotive Technology Center
Research Support for auto parts innovation center, public research institutions and research and education
facilities, including car shipping graduate
Establish Graduate School of Automotive and Shipping Technology
Build the foundation of stable supply of high skilled workers to lead the advancement of automotive and
shipbuilding industry, the regional strategic industries
Auto Valley Road Construction
Road construction from Buk-gu, Yul-dong to Jungsandong, Yaksu IC industry for the supply support system of
parts between auto companies in Valley and car manufacturers in the timely
Auto Plaza Project
Building construction having exhibition space, convention space, meeting rooms, rental office, accommodation,
sports and leisure facilities to support international marketing and promotion of the auto parts industry
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KSP Peru 2011
3. Automotive industry cluster of Korea(4)-Incheon Automobile Parts Industry Cluster
■ Information on Automobile Parts Cluster Infrastructure-related Projects
Business
Section
Integration
Complex
Installation of
Supporting
Facilities
Contents
• Automobile parts storage complex
- Promotion of integrated global knowledge-based industries
- Support for related businesses within the complex
- Placement of Domestic and foreign manufacturers, research institutes, and
related facilities
- Review of financial support, tax incentives, and technology development
• Creating an automotive theme park
- Exhibitions, museums, theme stores (specializing in interior and parts), Safety
Training Experience Center, RC car stadiums, etc.
• Creation of auto parts distribution complex
- Specialized parts center, used parts center, export assistance center
• Automotive technology center in Incheon
- Automotive parts engineering center
- Review of auto-parts fidelity
- Part authentication support
- Specialist training (both new and existing business workers)
- Processing, measurement, test / evaluation system management / support
• Automotive performance laboratory
- Driving test center and related research facilities
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KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (1)-Goal and Long Term Road Map
■ Goal : International auto parts base station and components cluster establishment in the
Tacna auto parts industrial city, ultimately establishing a complete automobile company
Internationalization of complete
cars and components R&D
Strengthening of
-Positioning and Internationalization
components R & D base
for establishment status of Auto
and domestic and
parts cluster
international network
Construction of
Infrastructure and
Network
-Construction of Innovation
-Enhancing Tacna ’s R & D
-Ultimately establish car companies
cluster center performance
and domestic and
international wide area
Internationalization
(2023-2025)
network
network for Peru parts
cluster infrastructure and
R&D functioning
Empowerment
(2019-2022)
Laying the foundation
(2013-2018)
Peru auto parts industry long term
road map
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KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (2)-Peru auto parts industry cluster model
Strengthening
research and
development
capabilities
• Auto Parts
Innovation Center
• Automobile
technology Center
Laying the
foundation
for the
Cluster
• Auto parts storage
Complex
• Modulation Complex
• Building Tacna Auto
Exhibition Hall
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KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (3)-Main Contents
■ Strategies to make Tacna into auto parts industrial city in terms of several functional aspects
can be expressed as such.
Tacna Auto Valley
Tacna Municipality
Peruvian Government
Construction of auto parts
Industry regional
Innovation systems
Laying the
Foundation and
strengthening the
Industrial Cluster
• Building
Strengthening
technology
development
capacity
• Building Auto
storage
parts research
complex
center
• Building
modulation
complex
• Industrial
Worker
training
• Establishing
R&D center
• Corporate
• Establish
Automotive
University
• Inviting
overseas
support for
professional
infrastructure
technology
personnel
development
development
Building Business
support Systems
• Building Auto
parts
innovation
center
• Strengthen
interagency
networking
support
16
Enabling
academic
partnerships
Promoting
globalization
• Establishing
• Building Auto
and operating
exhibition in
Auto
Tacna
development
forum
• Operation of
sectoral auto
• Strengthening
international
marketing
• Expanding
tech focus
overseas
group
network
KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (4)-Schedule
Business
Details
2013
2014
2015
Land purchase
Site
Building auto
preparation
parts storage
Sale /
occupancy
Building
modulation
complex
Land purchase
Site
preparation
Sale /
occupancy
Building auto Land purchase
parts
innovation
center
Site preparation
Building design
Construction
Operation
Land purchase
Site
Building auto preparation
tech center Building design
Construction
Operation
Department
Automotive
selection
department Department
establishment
establishment and
operation
17
2016
2017
2018
KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (5)-The Precondition for the success
of Peru Automotive Parts Cluster
■ This business must be guaranteed by the demands of global big company.
Auto parts industry requires guaranteed demand for the complete automotive company.
There are needs to be technical alliances and joint ventures for making acquiring technology
possible
■ Several factors, attributes of clusters, must be met.
Related companies and research facilities need to be in close proximity.
A cluster needs to include key components such as Public agencies, businesses, standards
certification agencies, research institutes, vocational training institutions, and various business
support agencies.
■ Master plan should be done before undertaking this business
Needs to do some benchmarking of foreign cases
When building a master plan, there are needs to be a collaboration with international
consultants to build a master plan fit for Tacna.
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KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (6)-The Precondition for the success
of Peru Automotive Parts Cluster
■ Stakeholders or principal agents in this project need to perform their role faithfully
Peruvian government
 Plays the role of the vision provider that suggests directions for the development of the
auto parts industry
 Selecting Tacna as a demonstrative region, creates international auto parts industry
cluster and reviews the plans for using it as a model for future clusters
 Makes it possible to develop and create clusters by connecting the support policies that
each local government is promoting, while providing long term support so that Tacna
can have indigenous development infrastructure
 Placing principal agents that will in the near future act as the specialized suppliers who
will be in charge of talent supply, college department establishment, and venture /
entrepreneurship attraction
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KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (7)-The Precondition for the success
of Peru Automotive Parts Cluster
■ Stakeholders or principal agents in this project need to perform their role faithfully
Tacna local government
Temporarily plays the role of the vision provider and the system organizer.
 Through Tacna builds infrastructure on which industry clusters can be formed and reflects
the opinions and positions of the corporations, who are the main consumers.
 For the creation and development of clusters, creates general consensus and definition
about the roles between each corporation.
 Needs to provide circumstances and opportunities for collective learning.
 Needs to create an environment to promote industrial innovation and expansion
 Need to work on linking to the network of universities, industrial associations, and
companies within the ready-formed international automotive industrial clusters
 Need to advertise internationally to attract multinational enterprises.
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KSP Peru 2011
4. Auto Parts Industry Cluster Model of Peru (8)-The Precondition for the success
of Peru Automotive Parts Cluster
■ This business must lead by the Peruvian central government
This project can be achieved by the Peruvian government because of two reasons.
First is because of the characteristics of the auto parts industry. Contracts and technology
transfers with carmakers are only possible by the Peruvian central government. The supply
contract with the carmakers can be executed by the Central government.
The other is that it is a locally specialized industry. It will be a huge investment for the country
to host an auto parts industry cluster in Tacna where there isn’t proper infrastructure. By
analyzing the feasibility they need to determine the adequate amount of investment and
possibilities.
Thus whether or not this business succeeds depend mostly on government participation.
Therefore the Peruvian central government should support the expansion of the auto parts
industry with finance and tax support plus everything the government can do, and should
perform the role of the Peruvian government.
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KSP Peru 2011
Thanks !
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