In an exclusive interview with South Korea’s ETNews, The Nguyen, Senior Vice President of FPT Korea and Vice President of FPT Automotive, shared insights on the challenges of the Korean automotive industry, how FPT Software's unique “Reach Global, Leverage Local" approach can address these matters, and the company's visions for one of the most influencing markets in the automotive domain.
FPT Korea recently inaugurated the second office in Seoul, asserting its rapid growth and commitment to addressing the increasing demand of South Korea's automotive market
Entering 2024, automotive remains a cornerstone for South Korea's economy, with the government and private sector showing unwavering efforts to maintain its growth momentum and gear up for the new era of software-defined vehicles (SDVs).
Setting its footprint in 2016, FPT Software and its subsidiary, FPT Korea, have thrived as a trusted IT services provider and partner for the national OEMs and Tier 1s. In 2023, FPT Software recently launched FPT Automotive, building on its 17+ years of experience and further solidifying its strategic investment in the automotive sector. The IT firm also made monumental strides in expanding its global presence and capacities with several strategic partnerships and M&A deals, especially recently opened a second office in Korea.
How did FPT Software start its automotive business in Korea?
South Korea is undoubtedly a global automotive powerhouse. As of 2022, it is the fifth-largest automobile manufacturer and the seventh-largest market worldwide by vehicle sales. However, given the national software engineering resources shortage, there is much room and opportunities for OEM Tier 1s and IT service providers from other economies to penetrate the market.
With that reality in mind, FPT has made automotive one of its strategic offerings since our first days entering Korea. Since then, automotive has become one of our key growth engines, and South Korea is one of our core markets besides the United States, Europe, and Japan. With about 200 on-site employees, nearly half of whom are locals, and over 1,000 offshore engineers just for this market, we have been delivering Korean OEMs with high-quality, end-to-end, and tailored solutions.
Both the automotive and tech landscapes are evolving drastically. What factors differentiate FPT Korea from other competitors in the automotive sector in Korea?
While global standards are a must-have, Korean OEMs tend to favor solutions and platforms with local integration and partners who obtain a deep understanding of Korean culture.
Currently, local vendors, mainly SMEs, can only handle a small part of the development chain, leaving most of the workload to third-party providers from China and India. Many Korean OEMs and Tier 1s have established branches in these countries to facilitate their operations. However, this cannot address the long-term cultural differences and rising geopolitical tensions. These countries are also emerging regional automotive players with notable growth in recent years, making the Korean automotive industry heavily dependent on its direct competitors.
Meanwhile, FPT Korea offers a mix of global experiences and local expertise, the “Reach Global, Leverage Local” approach, to help Korean OEMs and Tier 1s leverage their competitive edge. Our “Best Shore" delivery model, which combines different delivery locations—on-shore, near-shore, and offshore, has been trusted by industrial giants like Hyundai, Honda, and Volvo for its high flexibility, efficiency, and convenience. Next to that, after 8 years here, we have expanded our footprints with an approach adapted and tailored to the market. Combined with our global teams of seasoned experts and young IT talents, FPT Korea confidently provides clients with seamless cross-border services and cutting-edge solutions with a local touch.
FPT Software as well FPT Korea has made remarkable achievements in the automotive industry. What do you think are the reasons behind the company's success and growth?
Our investment in human resources and innovation is the driving factor for FPT's success and achievements in automotive services.
In particular, we always consider people development as the foundation of sustainable growth, especially when there is an increasing demand for IT talent in Korea and globally. Our global talent pool consists of 5,500 software development engineers, testers, LSI and CAD/CAE engineers, and automotive experts across diversified delivery models.
Next, FPT Software also invests significantly in technology capacity building through R&D and partnership channels. To this end, we have ensured full compliance with industry standards such as ISO26262 for functional safety management, Automotive SPICE for software development processes in the automotive sector, AUTOSAR for turn-key ECU solutions, or CMMI Level 5 for software quality and development efficiency improvement. FPT Automotive or its predecessor, Global Automotive & Manufacturing Division, offers a comprehensive suite of engineering services encompassing in-vehicle infotainment (IVI), Electronic Control Units (ECU), functional safety, security, automotive UI/UX design, wireless connectivity, and digital engineering.
Constantly innovating and adapting to the industry’s changing requirements have won us several big projects with Korean key OEMs and Tier 1s, such as IVI platform and application or AUTOSAR platform for one of the Korean largest automakers.
Another worth-mentioning reason comes from the fact that our home country, Vietnam, is emerging as the global new digital hub and innovation destination thanks to its ts prime population period with a young labor workforce, competitive labor cost, solid infrastructure, and stable political background.
The recent launch of FPT Automotive has underscored FPT Software's strategic investment in this domain. What is FPT Software and FPT Automotive's vision in Korea?
The automotive industry is not only growing but also shifting to the stage where vehicles are defined by software. With Korea being a tech-forward country, we can already see how innovation and tech advancements funneled across Korean OEMs development chains to facilitate the growing demands of complexity that the industry requires.
At FPT Software, we align the growth of our strategic development with the evolution of the global automotive business and the growth of Korean OEMs and Tier 1s. Our vision is to empower global OEMs, Tier 1 suppliers, and chipmakers to propel the new mobility era with more connected, software-defined, sustainable, and future-ready vehicles.
In the next five years, we look forward to partnering with global leaders in automotive technology to enhance our portfolio, focusing on automotive audio, AI integration, CDC solutions, and developing a complete AUTOSAR platform to ensure end-to-end development.
Regarding the Korean market, FPT Software aims to achieve 50 percent revenue growth, with the automotive business accounting for 40 percent of the total revenue, as well as continue to expand our workforce and presence in the country, forging long-lasting partnerships with existing customers, and scaling up to be a Global Delivery Centre.
The Nguyen (Max Nguyen) is the Senior Vice President of FPT Korea and Vice President of FPT Automotive. Prior to his current position, he held the role of Chief Delivery Officer and Head of Automotive Industry at FPT Korea, a subsidiary of FPT and the biggest Vietnam IT service company operating in South Korea.
Having worked in the IT industry for over 15 years, The is an automotive expert with a track record of successful projects in IVI and AUTOSAR. Joining FPT Korea since its first days, he has significantly contributed to spearheading the company's expansion in the market and delivering advanced solutions and services to clients of various industries, including Korean giants like LG, Hyundai, Doosan Group, Hanwha Group, Shinhan Bank, and Shinsegae I&C.