ZF Enters Korea’s Quality-Certified Auto Parts Market: What This Means for EV and Hybrid Vehicles
Daniel Kim Views
Automotive supplier ZF Friedrichshafen AG is poised to enter the Korean quality-certified parts market for the first time. Industry watchers are closely monitoring potential shifts in Samsung Electronics’ automotive supply chain as it proceeds with the acquisition of ZF’s ADAS business through Harman.
Industry sources revealed on the 10th that ZF has applied for certification with the Korea Automotive Parts Association (KAFA) to officially launch quality-certified parts in Korea. Two of the company’s factories are currently undergoing inspections, with product launch expected early this year following KAFA certification. The parts in question are reportedly exterior components for Volkswagen’s iconic Golf hatchback.
ZF, founded in 1915 and headquartered in Germany, is one of the world’s top three automotive suppliers, manufacturing transmissions, chassis components, and electric vehicle powertrains. The company operates several facilities in Korea, including plants in Anyang, Ansan, Gumi, and Changwon. ZF’s client roster includes most major mobility OEMs such as Hyundai, Kia, General Motors, Hyundai Transys, and Tata Daewoo.
Until now, ZF has exclusively supplied parts to OEMs as a Tier 1 supplier, avoiding the quality-certified parts market. Quality-certified parts, while not original equipment manufacturer (OEM) products, are officially recognized by designated organizations like KAFA as meeting or exceeding OEM quality standards.
ZF’s move into the Korean quality-certified parts market is driven by shifting domestic policies that encourage the use of these components.
The current Korean auto repair market is dominated by OEM parts, leading to ecosystem imbalances and auto insurance losses. In response, the government has implemented aggressive policies to normalize the use of quality-certified parts in insurance-covered repairs.
A recent revision to auto insurance terms now offers consumers a 25% cash rebate on the OEM part price when opting for quality-certified parts during repairs.
The Ministry of Land, Infrastructure and Transport has also mandated that repair shops inform consumers about quality-certified part options and integrate certified part information into the Automotive repair Operating System (AOS), further promoting market expansion.
An industry insider noted, “Compared to mature markets like the U.S. and Europe, Korea’s quality-certified parts sector is still in its infancy. The current oligopoly by a few OEMs has created a cycle of rising insurance premiums and shrinking repair shop margins. The government is actively working to disrupt this pattern.”
The source added, “Companies like ZF see significant potential in Korea’s quality-certified parts market and are expected to continually expand their product offerings.”
The industry is keenly observing whether Samsung Electronics, which is acquiring ZF’s ADAS division through its subsidiary Harman, will experience changes in its automotive supply chain.
Late last year, Samsung announced plans to acquire ZF’s ADAS division for approximately 2.6 trillion KRW (about 1.95 billion USD) through Harman. Industry experts speculate that post-acquisition, Samsung may leverage Harman to enter the ADAS and related component markets. The specifics of the M&A are still being negotiated, with the deal expected to close this year.
While ZF’s ADAS division primarily focuses on software, it also directly sells hardware including camera modules, radar, LiDAR solutions, and computing units for data processing. This has led to speculation that Samsung could supply these modules as quality-certified parts to the Korean market post-acquisition.
An automotive industry expert stated, “While various efforts have been made to promote quality-certified parts, consumer perception has been the biggest hurdle. If a company like Samsung enters this market, even indirectly, it could significantly influence public perception and impact both the repair industry and insurance profitability.”
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