DIC Launches Global Strategy to Respond to US IRA... Local Production in Full Swing

Kentucky Subsidiary 'Daeil USA' to Produce EV Parts
Utilized as Production and Marketing Hub in North America
Plans to Increase Local Sales to 1.3 Trillion Won by 2026

[Asia Economy Reporter Lim Jeong-su] DIC, a leading domestic automotive transmission and electric vehicle (EV) reducer company, is set to begin local production through its U.S. subsidiary, Daeil USA. Starting with the mass production of four key power transmission gears next year, the company plans to expand local production to EV reducers and drive modules, supplying major automakers such as Hyundai-Kia Motors, Volkswagen, GM (General Motors), and Ford.

Daeil USA is located in Murray, Calloway County, Kentucky, USA. It is 651 to 700 km, about 6 to 7 hours away from Alabama, where Hyundai and Kia are located, and 936 km, approximately 9 hours away from Detroit, home to General Motors (GM) and Ford. It is also within a 7-hour distance from automotive parts companies such as Dana and the German company ZF.

According to DIC on the 11th, Daeil USA will enter a mass production system for four major types of gears starting next year. The company plans to mainly supply parts to Hyundai Motor Group affiliates that supply gears to Hyundai-Kia factories, as well as to German automaker Volkswagen. In 2024, with the introduction of new equipment, production of key parts such as rotor shafts and rotor assemblies, which are supplied to Hyundai Motor Group’s local factories, as well as reducers, will commence. In 2025, Daeil USA plans to establish a new electric vehicle platform and produce EV drive modules.

Daeil USA was established in March 2018 on a 50,000-pyeong (165,299㎡) site in Murray City, Kentucky, USA. As of the end of last year, the value of the factory facilities is estimated at around 50 billion KRW. DIC plans to use Daeil USA, which had been in chronic stagnation, as a global growth strategy hub. By strengthening marketing in the North American market based on local accessibility, the company expects to secure new order opportunities from global automakers and parts suppliers.

Da-il USA Factory Exterior View

A DIC official explained, "Due to the U.S. Inflation Reduction Act (IRA), local production has become inevitable, prompting us to explore business expansion opportunities using Daeil USA." He added, "Kentucky offers incentives to companies located in the region, which can maximize profitability, and it will also help avoid uncertainties related to trade frictions arising during international trade."

Following this strategy, Daeil USA’s sales are expected to increase rapidly. Starting with the supply of four types of gears next year, sales are projected to rise to 58.4 billion KRW in 2024 when rotor assemblies are supplied, and to 893.5 billion KRW in 2025 when EV reducer production is in full swing. It is known that a significant portion of orders for the four major gears and rotor assemblies have already been secured through 2026.

EV drive operates on the principle of rotating the motor’s magnets by the current flowing through coils wound inside the motor. When the magnets inside the motor rotate, the connected rotor shaft rotates together, and this rotation is transmitted to the reducer, which moves the vehicle. The assembled parts including the rotor shaft are called rotor assemblies. The reducer replaces the gear that controls speed in internal combustion engine vehicles. Since the vehicle moves suddenly at high speed when electricity is supplied, a reducer is essential for speed control.

When EV drive module production and supply begin in 2026, the 50th anniversary of DIC’s founding, sales are expected to increase to 1.32 trillion KRW. If the plan proceeds as scheduled, Daeil USA’s sales will have grown approximately 22.6 times in just three years compared to 2024. A DIC official said, "Since we already monopolize reducer production domestically, we expect the supply of EV drive modules including reducers to Hyundai Motor Group entering the U.S. market, as well as GM, Ford, and Volkswagen, to increase exponentially."

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