2. Technical cooperation with NIPPONDENSO and localization of parts

(1) Technical cooperation with NIPPONDENSO

In January 1968, POONGSUNG Ind., which switched to the electric communication machinery manufacturing industry in 1964, began directly producing electrical communication products such as telephones and power meters as well as automobile products, and changed its name to “POONGSUNG Electric Co., Ltd.” in order to establish a definite identity based on a company name matching the industry.

Starting under this new name, POONGSUNG Electric expanded its Plants 1 and 2 in Seongsu-dong, and in 1969, it began to interact with Japanese automobile product manufacturer “NIPPONDENSO” and proceeded with specific negotiation of a technical cooperation in electrical equipment and instruments. At the time, NIPPONDENSO was also in contact with South Korean automobile product manufacturers to strengthen its assembly and production foundation in South Korea.

In November 1969, POONGSUNG Electric entered into technical cooperation with NIPPONDENSO and began the first localized production of South Korea’s automobile products.
Through an agreement with NIPPONDENSO, POONGSUNG Electric invested US $1.5 million in foreign capital and 300 million won in domestic capital to complete an automobile product plant by the end of 1970.

In addition to the prospect of supplying 5,000 units of automotive electrical equipment to be produced by Shinjin Motors (the predecessor to Daewoo Motors and SsangYong Motors), Hyundai Motor, and Asia Motors (later merged as Kia Motors), the company signed an export contract to the regions of Southeast Asia and the United States in 1972. At the same time, from the end of 1970, the company negotiated with NIPPONDENSO to produce 10 kinds of automobile parts, including car heaters, air conditioners, generators, starters, distributors, combination motors, wipers, regulators, ignition coils, and horns.