GM and Hyundai agree to explore collaboration on vehicles and manufacturing to reduce capital spending

DETROIT — General Motors and Hyundai Motor have entered into an agreement to explore "future collaboration across key strategic areas" in an effort to reduce capital spending and increase efficiencies, the companies announced Thursday.

The automakers' potential areas of interest include co-development and production of passenger and commercial vehicles, internal combustion engines, and clean-energy, electric and hydrogen technologies, they said in a joint press release.

The agreement, a nonbinding memorandum of understanding, comes as the automotive industry has renewed its focus on capital efficiency following years of aggressive spending to develop electric, autonomous and software-defined vehicles that have yet to manifest into profitable businesses.

The automakers also said they will "review opportunities for combined sourcing in areas such as battery raw materials, steel and other areas."

The framework agreement was signed by Hyundai Motor Group Executive Chair Euisun Chung and GM Chair and CEO Mary Barra, the companies said.

Spokespeople for the companies declined to provide additional details about the announcement, including potential capital investments or expected savings or efficiency gains.

The agreement comes months after Barra said now is a "prime time" for industry collaboration to share in capital spending. Both Barra and Chung echoed those comments in statements Thursday.

"GM and Hyundai have complementary strengths and talented teams. Our goal is to unlock the scale and creativity of both companies to deliver even more competitive vehicles to customers faster and more efficiently," Barra 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.

This is the first such agreement for Hyundai, according to a spokesman. GM, meanwhile, has been part of many partnerships or deals. Some tie-ups have led to products, but many others have not worked out or did not accomplish as much as initially expected.

Most notably, GM and Honda Motor have been involved in several partnerships involving fuel cells, all-electric vehicles, and autonomous vehicles, the latter with Cruise, a majority-owned subsidiary of GM. Success with each has varied.

An announced memorandum of understanding between GM and Nikola Corp. in 2020 failed to produce any meaningful results amid a litany of problems with the once-promising automotive startup.

In the early 2010s, before Barra was CEO, GM had notable partnerships with Ford Motor and former French automaker PSA Peugeot Citroën, now Stellantis, that also didn't deliver their anticipated results.