Hyundai Motor Group held the "Hyundai Motor (005380.KS) Group Win-Win Cooperation Agreement Ceremony" in Pangyo, Seongnam, Gyeonggi Province, on Sunday, 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 Planning and Coordination at Hyundai Motor Group, and representatives from 12 affiliates including Hyundai Motor, Kia (000270.KS), Hyundai Mobis (012330.KS), Hyundai Steel (004020.KS), Hyundai Engineering & Construction (000720.KS), Hyundai Rotem (064350.KS), Hyundai Engineering, Hyundai Transys, Hyundai Wia (011210.KS), Hyundai AutoEver (307950.KS), Hyundai Kefico and Innocean (214320.KS), as well as officials from about 150 first- and second-tier suppliers.
"Innovation in the future mobility industry can be sustained more firmly on the foundation of a healthy collaborative structure and win-win cooperation with suppliers," Chairman Joo said. "Today, when Hyundai Motor Group has decided to take responsibility itself and actively pursue win-win cooperation with suppliers, marks a starting point for our economy's transition to 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. Accordingly, the role of suppliers is expanding beyond simple transactional relationships to become supply chain partners that prepare together for the future industrial transition. "The competitiveness of our suppliers is the competitiveness of Hyundai Motor Group, and only when the entire supply chain is healthy can we all survive in the global market," President Suh said. "We will bring together the capabilities of the entire group so that no supplier is left behind alone during the future mobility transition."
Hyundai Motor Group decided to improve its payment terms to build a stable management foundation across the supply chain. It will pay suppliers within an average of 10 days, shorter than the legal payment deadline of 60 days, reducing the burden of fund management and enhancing management stability. It will also provide support such as education, monitoring and incentives so that the payment period 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 collection of payments within the supply chain. The win-win payment system is a payment structure operated based on the credit of the top-tier purchasing company, supporting first-, second- and third-tier suppliers in converting their delivery payments into cash early in a chain. Second- and third-tier suppliers can also raise funds at interest rates comparable to those of large corporations, reducing their financial cost burden. The FTC plans to provide incentives to companies that implement the agreement and to actively support the agreement's implementation by listening to suppliers' difficulties arising from the improved payment terms.
In addition, Hyundai Motor Group will provide various forms of win-win cooperation support to suppliers, including education, technology and finance. Hyundai Motor and Kia will support suppliers' transition to SDV, electrification and autonomous driving technologies, and will operate education programs to strengthen capabilities in artificial intelligence (AI), software, ESG (environmental, social and governance), carbon neutrality and cybersecurity. Hyundai Mobis will nurture suppliers of advanced component technologies in line with the expansion of the group's robotics business, while Hyundai Rotem will support the development of technical talent capabilities to bolster future manufacturing competitiveness.
Hyundai AutoEver will operate welfare programs such as AI education, support for obtaining certifications and health checkups, and will expand support to enhance suppliers' software capabilities. Hyundai Wia will expand suppliers' global business foundation through import-export certifications, while Hyundai Kefico will work to enhance suppliers' technological capabilities through measures such as providing free patents, supporting the recruitment of young workers and improving interest rates on the shared growth fund.
"We plan to raise the technology level of the entire supply chain by promoting the enhancement of 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 culture of win-win cooperation can spread throughout the supply chain."
