Hyundai Wia Corp. (011210.SE), South Korea's second-largest auto parts maker by sales, is in talks with three foreign companies to supply them with auto parts, the company's chief executive said late Tuesday.

The three companies are Renault S.A. (RNO.FR), Nissan Motors Co. (7201.TO) and Volkswagen AG (VLKAY), Chief Executive Lheem Heung-soo said in a press briefing.

Hyundai Wia's current customers include General Motors Co. (GM) and Hyundai Motor Group composed of Hyundai Motor Co. (005380.SE) and Kia Motors Corp. (000270.SE).

Hyundai Wia aims to decrease its heavy dependence on Hyundai Motor and Kia Motors, which collectively own a 78.79% stake in the company, to 65% of sales by 2020 from 75% in 2009.

As it targets to achieve KRW20 trillion ($18 billion) in sales by 2020, Hyundai Wia is stepping up efforts not only to diversify its business portfolio but also to expand its overseas production capacity to meet a rising demand, said Lheem, who also serves as president.

"We will achieve the 2020 sales target by diversifying our businesses into wind-power generation, electric vehicle parts and recycling," the chief executive told reporters during the briefing.

The company's main businesses now manufacture automotive modules, engines and machine tools.

"We expect to achieve KRW14 trillion (of sales) through current businesses and the rest through the new businesses, which also include producing in-wheel drive motors and decelerators," said Lheem.

He said the company will spend some of the proceeds of its planned KRW480 billion ($430 million) initial public offering to diversify its income sources, while planning to use KRW100 billion of its expected IPO proceeds to repay debts.

It expects sales of KRW4.4 trillion for the whole year of 2010, up from KRW3.118 trillion a year earlier.

To enter the European markets, the company is considering building a plant in Poland, the chief executive said. Hyundai Wia already has auto parts plants in South Korea, India and China.

But "building a plant in the U.S. and an additional factory in China is not under consideration for now," Lheem said without elaborating.

The IPO price will be decided on Jan. 31, said an official from Mirae Asset Securities, which is managing the IPO together with Shinhan Investment Corp.

He didn't answer the question about an estimated IPO price for Hyundai Wia.

Hyundai Wia has set an indicative range of between KRW53,000 and KRW60,000 per share.

-By Kyong-Ae Choi, Dow Jones Newswires; 822-3700-1903; kyong-ae.choi@dowjones.com
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