Halla Visteon Climate Control (HVCC) Global has gained the contract to supply air conditioning systems to electric car manufacturer Tesla Motors for its Model S sedan, reports the Korea Economic Daily. The South Korean supplier will supply 40,000 air conditioning systems to Tesla from 2014.
Significance: The contract comes on the back of HVCC's efforts to acquire more European and US customers as it aims to reduce its reliance on Hyundai and Kia, which are forecasting more moderate sales volume growth of just 4% this year – the slowest rate of growth in the last six years. In June, HVCC CEO Park Yong-Hwan stated that the supplier had clinched enough non-Hyundai orders to keep its compound sales growth rate averaging at least 7% for the next three years. However, Park declined to identify the new customers. The Tesla deal comes as HVCC has been working on a number of initiatives to develop environmentally friendly car-specific air conditioning systems, including for electric and fuel-cell cars. The contract is yet further testimony to the growing reputation of South Korean component suppliers and their expanding global client bases, a trend that has also been aided by the free-trade agreements that South Korea has signed with Europe and the United States. Recently, another South Korean supplier, LG Group, was reported to be involved in talks with premium automaker BMW over future partnerships. Meanwhile, Tesla has ramped up production of its Model S sedan to more than 500 per week, with an aim to deliver at least 21,000 vehicles this year and raise capacity to 800 units per week by late 2014.
