If the collaboration is successful, automakers will be able to offer a wider range of products to customers faster than before.
- Hyundai Motor and General Motors have signed a non-binding agreement to explore collaboration opportunities.
- Automakers may initiate joint development of new models, powertrains and technologies.
- The purpose is to reduce R&D costs, shorten development time and improve competitiveness.
It’s a new day for new potential partnerships between automakers to reduce costs and improve competitiveness. Hyundai and General Motors signed a memorandum of understanding (MoU) to explore opportunities for collaboration on future vehicles, supply chain improvements and clean energy technologies.
The non-binding framework agreement was signed by Hyundai Motor Group Executive Chairman Chung Eui-sun and GM Chairman and CEO Mary Barra. Next, the two sides will discuss various opportunities and work towards a “binding agreement.” These discussions will begin “immediately,” highlighting the urgency of the matter.
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Potential areas of cooperation between Hyundai and GM include future passenger cars and commercial vehicles, as well as internal combustion engines, electric and hydrogen powertrains. The two auto groups will also consider joint procurement of battery raw materials, steel and other areas in order to benefit from economies of scale.
According to the joint statement, Hyundai and GM aim to “improve efficiency” and “enhance competitiveness.” Collaborating in key strategic areas will help reduce R&D costs and shorten development time for future products. If successful, the partnership will allow the automakers to offer a wider range of vehicles to customers faster than before.
“GM and Hyundai have complementary strengths and talented teams,” said Mary Barra, GM Chairman and CEO. “Our goal is to leverage the scale and creativity of our two companies to deliver more competitive vehicles to customers faster and more efficiently.”
“This collaboration will enable Hyundai and GM to evaluate opportunities to enhance competitiveness in key markets and automotive segments, and to improve cost efficiencies and deliver greater customer value through combined expertise and innovative technologies,” said Chung Eui-sun, executive chairman of Hyundai Motor Group, on behalf of the Korean group.
Collaborate or relax
A year after GM and Honda canceled a $5 billion joint development deal for an affordable electric SUV, GM may have found a suitable alternative in Hyundai, with which it is exploring broader collaboration opportunities.
Most automakers today have some form of partnership or alliance with similar cost-cutting and efficiency goals. Earlier this year, Honda joined forces with Nissan and Mitsubishi, while Toyota recently teamed up with Subaru and Mazda.
If you factor in the Volkswagen Group and the 14-brand Stellantis portfolio, now is not the time for lone wolves in the auto industry. After all, Chinese brands have begun to enter global markets, making it harder for established automakers to remain competitive.
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