Cashing in on Korea: Delphi reaping rewards on Asian investments

SEOUL -- As Asian hot spots go, South Korea is No. 1 for General Motors Corp.'s Delphi Automotive Systems Div. Even China, where Delphi sales are projected to reach $1 billion by 2000, pales in comparison.

"Our sales in Korea could easily reach $2 billion by 2000 with good activity with other companies," says William A. Ebbert, Delphi's regional president.

Asia/Pacific is expected to account for $3 billion in sales for Delphi by 2000, up from next to nothing 10 years ago and $1 billion today. Delphi's four Korean joint ventures will account for more than half of the region's total revenues, Mr. Ebbert predicts, with sales from those operations rising to at least $1.7 billion by the end of the decade.

Delphi's assault on Asia began with its Daewoo Automotive Components Ltd. (DAC) 50/50 joint venture with Daewoo Group in 1984. The parts division now has a Tokyo-area Asian Technical Center established in 1992, named Mr. Ebbert regional president in 1993 and in 1994 set a sweeping game plan for wider penetration in the market.

The DAC venture has been growing at a 20% to 30% annual clip. The Daewoo-managed operation has become a cornerstone for Delphi in the Asia/Pacific region. In total, DAC has parts supply contracts in hand that will triple its size by 2000, a growth prospect that has set the table for the venture to make an initial public offering on the Korean stock exchange this year.

Much of the growth at DAC is a result of expansion in vehicle production at Daewoo, which has seen output more than double since 1990. But DAC also has contracts with Hyundai Motor Co. Ltd., Kia Motors Corp., and Asia Motors Co, Ltd. Sales could reach $600 million by the time 1995 numbers are tabulated.