Hyundai Motor Group held the "Hyundai Motor (005380) Group Win-Win Partnership Signing Ceremony" in Pangyo, Seongnam, Gyeonggi Province, on Monday, signing an agreement with the Fair Trade Commission (FTC) and its first- and second-tier suppliers to strengthen the future mobility ecosystem.
The ceremony was attended by FTC Chairman Joo Byung-gi and other key FTC officials, along with Suh Kang-hyun, President of Hyundai Motor Group's Planning and Coordination Division, and representatives from 12 affiliates including Hyundai Motor, Kia (000270), Hyundai Mobis (012330), Hyundai Steel (004020), Hyundai Engineering & Construction (000720), Hyundai Rotem (064350), Hyundai Engineering, Hyundai Transys, Hyundai Wia (011210), Hyundai AutoEver (307950), Hyundai Kefico, and Innocean (214320), as well as officials from about 150 first- and second-tier suppliers.
"Innovation in the future mobility industry can be sustained more firmly on a foundation of healthy collaborative structures and mutual growth with suppliers," Chairman Joo said. "Today, when Hyundai Motor Group has decided to take responsibility itself and actively pursue win-win cooperation with its suppliers, marks the starting point for our economy to transition into an advanced economic system."
Hyundai Motor Group is pursuing various future businesses including robotics, software-defined vehicles (SDV), autonomous driving, future air mobility, hydrogen energy, and smart factories. As a result, suppliers' roles are expanding beyond simple transactional relationships to become supply chain partners preparing for the future industrial transition together. "The competitiveness of suppliers is the competitiveness of Hyundai Motor Group, and the entire supply chain must be healthy for all of us to survive in the global market," President Suh said. "We will bring together the group's entire capabilities so that suppliers do not fall behind alone during the future mobility transition."
Hyundai Motor Group decided to improve payment terms to build a stable management foundation across the supply chain. The group will pay suppliers within an average of 10 days, shorter than the legal payment deadline of 60 days, reducing their cash management burden and improving management stability. It will also provide education, monitoring, and incentives so that the payment deadlines for funds that first-tier suppliers pay to second-tier suppliers can be shortened as well.
Hyundai Motor Group will also increase the use of the win-win payment system to support stable payment collection within the supply chain. The win-win payment system is a settlement scheme operated based on the credit of the top-tier purchasing company, supporting first-, second-, and third-tier suppliers in converting delivery payments into cash early in a chain. Second- and third-tier suppliers can also raise funds at interest rates on par with large corporations, reducing their financing cost burden. The FTC plans to actively support the implementation of the agreement by providing incentives to companies that fulfill the pact and listening to suppliers' difficulties arising from the improved payment terms.
In addition, Hyundai Motor Group will provide various win-win cooperation support to suppliers, including education, technology, and financing. Hyundai Motor and Kia will support suppliers' transition to SDV, electrification, and autonomous driving technologies, and operate education programs to strengthen artificial intelligence (AI), software, ESG (environmental, social and governance), carbon neutrality, and cybersecurity capabilities. Hyundai Mobis will foster suppliers with advanced parts technology in line with the group's robotics business expansion, while Hyundai Rotem will support the development of technical talent capabilities to underpin future manufacturing competitiveness.
Hyundai AutoEver will operate welfare programs such as AI education, certification support, and health checkups, and expand support to enhance suppliers' software capabilities. Hyundai Wia will expand suppliers' global business foundation through import-export certification, while Hyundai Kefico will work to enhance suppliers' technological capabilities through measures such as providing free patents and other technical support, supporting the hiring of young workers, and improving interest rates on its shared growth fund.
"We plan to raise the technological level across the entire supply chain by enhancing supplier competitiveness and to grow the future industrial ecosystem together with our suppliers," a Hyundai Motor Group official said. "We will continue to provide practical support so that a fair and sustainable win-win cooperation culture can spread throughout the supply chain."
