If the partnership succeeds, it will enable the automakers to offer a broader range of products to their customers more quickly than before
Another day brings another potential partnership between automakers, aimed at cutting costs and boosting competitiveness. Hyundai and GM have signed a Memorandum of Understanding (MoU) to explore opportunities for collaboration on future vehicles, supply chain enhancements, and clean energy technologies.
Hyundai Motor Group Executive Chair Euisun Chung and GM Chair and CEO Mary Barra signed the non-binding framework agreement. The next step is for both companies to explore various opportunities and work toward “binding agreements.” These discussions will begin “immediately,” emphasizing the urgency of the matter.
Hyundai and GM are exploring collaboration in areas such as future passenger and commercial vehicles, as well as internal combustion, electric, and hydrogen powertrains. They will also look into joint sourcing of battery raw materials, steel, and other components to leverage economies of scale.
According to their joint announcement, Hyundai and GM aim to “improve efficiencies” and “enhance competitiveness.” By working together in strategic areas, they hope to reduce R&D costs and accelerate product development. If successful, this partnership could allow both automakers to offer a wider range of vehicles to customers faster than before.
Mary Barra, GM Chair and CEO, said, “GM and Hyundai bring complementary strengths and talented teams. Our aim is to harness the scale and creativity of both companies to deliver more competitive vehicles to customers faster and more efficiently.”
Speaking for the Korean group, Euisun Chung, Hyundai Motor Group Executive Chair, remarked, “This partnership will allow Hyundai and GM to explore ways to boost competitiveness in key markets and vehicle segments, while driving cost efficiencies and enhancing customer value through our combined expertise and innovative technologies.”
Collaborate or Lose
This news comes a year after GM and Honda called off their $5 billion agreement to jointly develop affordable electric SUVs. Now, GM may have found a promising alternative in Hyundai, with whom it is exploring a wider range of collaboration opportunities.
Today, most automakers are involved in some form of partnership or alliance, all aiming to cut costs and boost efficiency. Earlier this year, Honda teamed up with Nissan and Mitsubishi, while Toyota recently partnered with Subaru and Mazda.
When you factor in the VW Group and the 14-brand Stellantis portfolio, it’s clear that going it alone is no longer an option in the automotive industry. Chinese brands have already begun expanding into global markets, making it even harder for established automakers to stay competitive.
