GM, Hyundai to explore collaboration across range of tech, products

General Motors and Hyundai Motor Co. have agreed to explore partnerships across a range of areas, including vehicle development and production as well as electric and hydrogen powertrain technologies, in a move that underscores mounting pressure on the auto industry to cut costs and achieve massive scale.

GM CEO Mary Barra and Hyundai Motor Group Executive Chair Euisun Chung signed a memorandum of understanding to "immediately" assess areas for cooperation and possible binding agreements, the companies said in a brief joint news release issued Sept. 12.

"Potential collaboration projects center on co-development and production of passenger and commercial vehicles, internal combustion engines and clean-energy, electric and hydrogen technologies," the companies said. "The two leading global OEMs also will review opportunities for combined sourcing in areas such as battery raw materials, steel and other areas."

The goal is to improve efficiencies, boost competitiveness, share cost burdens and bring a wider range of products to market at a faster pace, the companies said.

Other details were scant, including what kind of time frame the companies were working under. The joint announcement made no mention of investments or the possibility of a capital alliance. Nor did the companies specify markets of focus.

Barra said collaboration has the potential to enable "disciplined capital allocation."

Cost reduction and increased scale are key priorities, the companies 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," Chung said. The agreement is expected to concern Hyundai but not sibling brand Kia.

Teaming the top U.S. and South Korean automakers has the potential to generate mammoth scale and to leverage a huge tool chest of advanced technologies. Their combined sales exceed 10 million vehicles annually, with GM's tally of 6.2 million in 2023 and Hyundai Motor's 4.2 million.

Scale in the double-digit millions lifts the duo into the realm of Japanese giant Toyota Motor Corp. and German juggernaut Volkswagen Group. Toyota sold 11.2 million vehicles in 2023, including its Hino and Daihatsu subsidiaries. VW Group sold 9.2 million.

The gambit is a rare move for South Korea's flagship manufacturer, which long ago brought Kia under its umbrella but has little history of deep cooperation with overseas rivals.

GM, by contrast, has dabbled in loose partnerships in the past, including with Italy's Fiat and Japan's Suzuki and Subaru. GM still has a technological tie-up with Honda Motor Co. in areas such as hydrogen fuel cell systems and autonomous driving.

GM has a long-standing manufacturing, design and product development footprint in South Korea. The business there, a legacy of GM’s tie-up with Daewoo Motors, has struggled in recent years amid falling sales in the market and spiraling costs. Closer collaboration with hometown favorite Hyundai could possibly offer avenues for relief.

Honda, another medium-sized player on the global stage with sales just exceeding 4 million, is among the automakers reaching out for partners. In March, Honda entered an agreement with Nissan Motor Co. to explore joint partnership plays, a move mirrored now by GM and Hyundai.

Mitsubishi Motors Corp. signed on to the Honda and Nissan effort in August.

Hyundai's overseas overture comes on the heels of the company's sponsorship of a summit of business and political leaders from South Korea, the U.S. and Japan.

The gathering, called the Trilateral Executive Dialogue, took place Sept. 4 in Seoul and brought Chung and other South Korean executives together with U.S. lawmakers and businesspeople, as well as representatives from such Japanese companies as Toyota and Denso.

The forum aimed to build dialogue and cooperation among the countries.