2024 appears to be the year of alliances in the automotive sector as more and more companies are joining forces. The latest tie-up is rather unexpected as Hyundai and General Motors could collaborate on a variety of projects. The two companies have signed a Memorandum of Understanding to investigate the possibility of jointly developing and manufacturing cars.
If the partnership comes to fruition, Hyundai and GM will work together on gas cars as well as EVs. The collaboration could include both passenger and commercial vehicles. In addition, the framework agreement mentions the possibility of channeling efforts into hydrogen technology. The companies are also interested in combining their resources like steel, battery raw materials, and others.
After signing the papers, the talks between the two companies are starting "immediately." The goal is to deliver "even more competitive vehicles to customers faster and more efficiently," according to GM CEO Mary Barra. A more "disciplined capital allocation” would allow the two large automakers to cut down expenses by investing more efficiently.
It's easy to see why the two companies would want to team up: bring down development and production costs while reducing the time needed to engineer new cars. Potentially massive economies of scale would enable Hyundai and GM to be more competitive in a challenging industry where Chinese automakers are becoming a real threat, especially in the EV segment.
Nearly a year ago, GM and Honda scrapped plans to jointly develop cheaper EVs. The original plan was to launch the first models in 2027. That's not happening anymore. Perhaps Hyundai can fill the void left after Honda's departure, but it's too early to know for sure.
Speaking of partnerships, Honda and Nissan agreed in mid-March to hold negotiations about working together on EVs, software, and "complementary products." At the beginning of August, Mitsubishi confirmed it would join the freshly established alliance. Elsewhere, Toyota, Mazda, and Subaru held a joint conference a few months ago to express their long-term commitment to combustion engines.
But having multiple cars that are mechanically related isn't necessarily a recipe for success nowadays if the management isn't done properly. Just ask the Volkswagen Group, which apparently has "one, maybe two years" to turn things around, according to its finance chief.
Stellantis has its fair share of problems as well, with US dealers sending CEO Carlos Tavares an open letter to highlight the "disaster" the company is facing.
At Toyota, it's not all sunshine and rainbows either given the scandal at subsidiary Daihatsu regarding problematic crash tests.
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