Paris-based automotive parts manufacturer Valeo is reportedly planning to invest USD 56 million in Daegu, South Korea, which is located 200 kilometers southeast of Seoul to capitalize on the growing autonomous driving market in the city.
As per the agreement signed with the Daegu city government, the French automaker is expected to establish a manufacturing unit, with the construction scheduled to start in October 2022 and end in July 2023.
The new establishment will be in the city's industrial complex area and will produce sensors for steering as well as sophisticated driver assistance systems. It is worth noting that sensors are necessary for autonomous driving as they identify dangers and alert drivers.
Under the terms of the agreement, Valeo is planning to set up a foreign investment company in Daegu namely ‘Valeo Mobility Korea’ as well as keep supporting regional student internship programs as part of its partnership with Daegu.
Sources claimed that the city's strength in the blockchain, big data, and artificial intelligence fields, as well as its great accessibility to potential clients, encouraged the automaker to invest in specific cities in South Korea.
The CEO of Valeo's ADAS (Advanced Driver Assistance Systems) business division Stiv Smudja stated that Daegu has a strong industry-academic cooperation structure and excels as a production hub for auto parts. The executive added that they intend to invest the company's technologies and assets in Valeo Mobility Korea to ensure the company's success.
Meanwhile, the French auto component manufacturer reported a half-year core profit that was somewhat higher than anticipated as well as confirmed its full-year estimate, citing an expected rise in global auto production.
Valeo's earnings before interest, taxes and depreciation & amortization for the first half of the year decreased by about 8% year over year to USD 1.12 billion, although they outperformed the analyst consensus estimate provided by the firm of around USD 1 billion.