[Biz Leader] Lim Younghwan, CEO of Gyeyang Electric, "Aiming for No.1 in Automotive Motor Sector"

Lim Young-hwan, CEO of Gyeyang Electric
Photo by Gyeyang Electric

[Asia Economy Reporter Yoo Hyun-seok] "We have a mission to increase profitability through management efficiency and return it to shareholders and employees. My goal is to embed the experience I gained at Samsung Electro-Mechanics into Keyang Electric and become number one in the automotive motor sector."

Lim Young-hwan, CEO of Keyang Electric, was appointed as CEO last March. It has been five years since he joined Keyang Electric in 2016. During this period, he served as head of the Tool Business Division. Previously, he worked at Samsung Electro-Mechanics and also served as the head of the Dongguan branch in China.

As the head of a company, he explains that the biggest burden is having to make decisions. CEO Lim said, "The biggest burden is having to take responsibility for all decisions," adding, "There is a big difference in corporate culture compared to the company I was previously with, and it is difficult to manage everything from big to small matters."

Feeling the burden of choice as CEO, Lim set improving profitability as his goal for this year. Keyang Electric recorded consolidated sales of 380 billion KRW and operating profit of 2.8 billion KRW last year. Sales increased by 1.24% compared to the previous year, but operating profit decreased by 13.48%. Despite COVID-19 last year, sales increased. The problem lies in profitability. Operating profit has declined for five consecutive years since 2016.

The decline in profitability is due to sluggishness in the tool business. Keyang Electric's business is broadly divided into tools and automotive electronics. Last year, the tool business recorded sales of 126.7 billion KRW. This is a 4.71% increase from the previous year but 14.29% less compared to the peak performance of 147.7 billion KRW in 2017. Tools are classified into cordless and corded types. Among them, Keyang Electric has consistently held the number one market share (M/S) domestically in corded tools, but according to CEO Lim, this does not significantly help profitability. On the other hand, cordless tools have the advantage of higher profitability but have been sluggish due to competition from overseas companies.

He said, "In the past, it was even challenging to launch five products annually, but now, with improved research and development (R&D) capabilities, we launched 12 products this year," adding, "The response to new products is not bad, and internally, we aim for over 30% growth. If the plan goes as expected, profitability will improve significantly."

The automotive electronics business, which accounts for the largest portion of sales, recorded 253 billion KRW last year, a 0.39% decrease from the previous year. The company explained that although the first half of last year was sluggish due to COVID-19, the second half improved, resulting in performance similar to 2019. While the automotive electronics business is steadily improving, the company plans to continuously develop new products without complacency. As product unit prices tend to decline over time, potentially worsening profitability, they aim to improve performance through new products and cost innovation.

CEO Lim said, "The main product in the automotive electronics business is motors for power seats, and as convenience features increase from small to large cars, adoption rates are rising, so growth is expected to continue," adding, "The second main product, motors for brakes, is also positive as its use is expanding from large luxury cars to small and medium-sized vehicles." He added, "Going forward, we will focus on cost innovation and strengthening new product development with the goal of entering the global top tier."

Along with improving profitability, CEO Lim expressed his determination to change the corporate culture and build a solid global strong small and medium enterprise. The automotive and machinery industries are traditionally conservative and vertical, which does not fit the current era.

He said, "This industry itself has a conservative atmosphere, making communication difficult," adding, "In tools and motors, even a small defect can threaten the company's survival, so we will break down walls between departments to increase synergy and enhance communication with employees to refresh the corporate culture." He continued, "Through this approach, our goal is to become number one in automotive motors and to capture more than 1% market share in the global tool market, which is worth 30 trillion KRW, within five years, although our current share is minimal."

This content was produced with the assistance of AI translation services.