Hyundai and GM announce partnership to build cars together

Auto giants of East and West are coming together for a potential partnership as South Korean carmaker Hyundai and the American automaker General Motors have signed a Memorandum of Understanding (MoU) to explore collaboration opportunities for future vehicles. The manufacturers said the partnership will see both companies collaborate on future products, supply-chain improvements and clean-energy technologies.

Hyundai and GM will work together on the co-development and production of passenger and commercial vehicles, internal combustion engines and clean-energy, electric and hydrogen technologies. The framework was signed by Chair Euisun Chung - Group Executive, Hyundai Motor, and Mary Barra, Chair and CEO - GM.

Speaking about the collaboration, Mary Barra said, “GM and Hyundai have complementary strengths and talented teams. Our goal is to unlock the scale and creativity of both companies to deliver even more competitive vehicles to customers faster and more efficiently."

Euisun Chung, Hyundai Motor Group Executive Chairman, said, “This partnership will enable Hyundai Motor and GM to evaluate opportunities to enhance competitiveness in key markets and vehicle segments, as well as drive cost efficiencies and provide stronger customer value through our combined expertise and innovative technologies."

The agreement is said to be non-binding and will see both companies first discuss various opportunities together “immediately." The automotive giants are also considering sourcing raw materials together for batteries, steel and other components in a bid to maximise economies of scale.

It’s A Collaborative Effort

Automotive collaborations aren’t exactly new and we’ve seen carmakers immensely benefit from the same with shared technologies, R&D costs and shorter development cycles for products. The companies can create modular platforms that can adapt to suit different requirements across the spectrum.

The announcement also comes after GM and Honda cancelled their $5 billion deal for a joint venture, which would’ve seen the auto players co-develop affordable electric SUVs. However, it seems GM has found a more like-minded partner in Hyundai. Meanwhile, Honda recently announced its partnership with Nissan and Mitsubishi over the development of future electric vehicles.

With more stringent emission laws coming into effect globally, more and more automakers have chosen to collaborate to reduce development costs in a bid to meet carbon neutrality and emission goals. Other carmakers like Toyota also announced partnerships with Subaru and Mazda. Meanwhile, global giants like Volkswagen and Stellantis have already been sharing technologies and development costs across brands to keep development costs low.

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