Jeong Ui-seon meets GM Chairman and signs MOU for cooperation
Korea-US alliance to lead Tesla-BYD
Increase profitability through joint procurement of raw materials
Replace platforms by vehicle type to improve weaknesses
Hyundai Motor Company and General Motors (GM), which are ranked first in Korea and the United States respectively, have formed an alliance. Hyundai Motor Group Chairman Chung Eui-sun personally met with GM Chairman Mary Barra in the United States and signed a memorandum of understanding (MOU) for comprehensive cooperation. Analysis suggests that the two companies have formed a ‘future car alliance’ to become the world’s number one in electric and hydrogen vehicles in the future.
According to Hyundai Motor Company and GM on the 12th, Hyundai Motor Company Chairman Chung Eui-sun and GM Chairman Mary Barra recently met at Genesis House New York and signed a comprehensive cooperation MOU. Hyundai Motor Company and GM issued a joint press release stating, “Potential areas of cooperation include joint development and production of eco-friendly energy, electric and hydrogen technologies,” and “The two companies are reviewing integrated sourcing methods for battery raw materials, steel, and other materials.” The automobile industry is evaluating the cooperation between the two rival companies as highly unusual.
The focus of the cooperation is on future cars. Chairman Chung, who attended the signing ceremony that day, said, “Hyundai Motor Company and GM will be able to explore opportunities to strengthen their competitiveness in the global market,” and “We will improve efficiency based on the expertise and innovative technologies that both companies possess.” This is a passage that can be read as an intention to strengthen cooperation on future cars such as electric cars, hydrogen cars, and autonomous driving. In particular, experts explained that the part that “the two companies will integrate sourcing of materials” should be noted.
Chairman Barra said, “This partnership between the two companies has the potential to make product development more efficient through systematic capital allocation.” If Hyundai and GM actually jointly purchase raw materials for electric vehicle batteries, their profitability could increase significantly. This is because purchasing battery raw materials, including cathode and anode materials, together increases their negotiating power and can lower the unit price.
Lee Ho-geun, a professor at Daedeok University’s Department of Future Automotive Engineering, explained, “If you develop a platform dedicated to electric vehicles, you have to sell more than 100,000 units to make a profit,” adding, “However, since there is no place that can achieve such results right now, the need for collaboration between the two companies has probably been highlighted.”
The future car alliance between Hyundai and GM is also interpreted as a reflection of a sense of crisis that they cannot hand over the initiative to strong electric car competitors such as Tesla and BYD. Based on sales last year, Hyundai and Kia ranked third and GM ranked fifth, but when looking only at electric cars, they fell to seventh and tenth place, respectively. Tesla in the US and BYD in China are overwhelmingly competing for first and second place. It seems that Hyundai and GM have judged that if this atmosphere continues, it will become more difficult to catch up as time goes by.
This alliance could allow the two companies to share a platform that serves as the basis for making vehicles, thereby compensating for their weaknesses. Hyundai would utilize GM’s pickup truck platform, which is its strength, while GM would utilize Hyundai’s compact and midsize passenger car platform.
Lee Hang-gu, head of the Automotive Convergence Technology Institute, said, “Hyundai and GM can form a complementary relationship because their main vehicle models do not overlap,” adding, “This is an opportunity for the two companies to enhance their autonomous driving technology through joint research and development.”
There are also assessments that this collaboration has increased Hyundai Motor’s chances of entering the North American hydrogen car market. Since government support policies for the eco-friendly car industry are focused on domestic companies, the collaboration with GM is expected to serve as a bridgehead for opening up the U.S. hydrogen car market. From GM’s perspective, it is expected that it will be able to receive support for Hyundai Motor’s advanced technology, which ranked first (32.7%) in the global hydrogen car market share in the first half of this year (January to June).
Reporter Kim Jae-hyung [email protected]
Reporter Han Jae-hee [email protected]
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2024-09-12 22:02:32