The Korean parts maker has ended the joint business partnership with IHI, with the production facility to become a wholly owned unit of Hyundai Wia, he said.

But Hyundai Wia will maintain technology ties with the Japanese company, the spokesman said.

Hyundai Wia, which has largely been dependent on imported turbo chargers in the past, established the joint company to domestically produce the auto part.

A turbocharger, or turbo, is a compressor that is used to force more air into an internal combustion engine. This enhances the thermal efficiency of the engine and leads to more power output.

The Seosan plant has a production capacity of 200,000 turbo chargers a year. It produced 70,000 turbo chargers last year and aims to churn out 1.2 million units annually by 2020.

Hyundai Wia earns 70 percent of its total sales by supplying engines, modules, turbo chargers, and other parts to Hyundai Motor and Kia Motors. In the January-March quarter, the company's net profit plunged 96 percent to 2.02 billion won ($1.8 million) from 48.66 billion won a year earlier on declines in vehicle sales, according to a regulatory filing. 

Operating profit fell 46 percent to 43.08 billion won in the first quarter from 80 billion won a year earlier. Sales rose 1.8 percent to 1.871 trillion won from 1.839 trillion won, it said.

Hyundai Wia is 25.35 percent owned by Hyundai Motor, 13.44 percent by Kia Motors and 1.9 percent by Hyundai Motor Group Vice Chairman Chung Eui-sun.  (Yonhap)