Facing tariff-fueled price war, Hyundai, GM forge alliance on five new models

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Facing tariff-fueled price war, Hyundai, GM forge alliance on five new models

Published: 07 Aug. 2025, 15:03 Updated: 07 Aug. 2025, 15:06

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Hyundai Motor Group Executive Chair Euisun Chung, right, shakes hands with General Motors CEO Mary Barra after signing an agreement pledging cooperation in automobile development in New York in September 2024. [HYUNDAI MOTOR]

Hyundai Motor and General Motors will jointly develop five new vehicles slated for release in 2028, an unusual collaboration between fierce market rivals, in a strategic bid to drastically reduce costs to secure footing amid a tariff-driven price war.

Under the agreement announced on Thursday, the two auto giants will develop four hybrid and gasoline vehicles targeting Central and South American markets — a compact sedan, a compact SUV, a compact pickup and a midsize pickup — and an electric van for the North American market.

“Hyundai will lead the development of platforms for the small vehicles and the electric van, while GM will take charge of the midsize truck platform,” said a spokesperson for Hyundai Motor.

"Exterior and interior designs, however, will be distinct, each model featuring its own brand logo. Commercialization and pricing strategies will also be handled independently by each company."

Market launch is slated for 2028 at the earliest, with production of the electric van to take place in the United States. With five new vehicles, Hyundai will ramp up production in global markets by around 80,000 units per year.

The two auto giants also stated that they are considering further cooperation in sourcing auto parts and raw materials.

Hyundai Motor Group Metaplant America in Georgia, where Hyundai and Kia make EVs and hybrid cars. [HYUNDAI MOTOR]

By passing off production of noncore strengths to each other, the two firms are expected to cut vehicle development costs by nearly half. Hyundai excels in small SUVs and hybrids, while GM's strength lies in pickup trucks.

“The strategy is to leverage each company's core competencies to rapidly increase global market share and challenge the dominance of Toyota Motor and Volkswagen Group, the two biggest automakers globally,” said Moon Hak-hoon, an automotive engineering professor at Osan University.

“Additionally, Hyundai currently faces a tariff issue of sourcing auto parts in Korea, but with this partnership, Hyundai may use the supply chain of GM based in the United States.”

Hyundai Motor Group was the No. 3 automaker, selling 6.66 million vehicles globally last year, while GM Group followed in fourth place with 5.48 million units.

Kia's Tasman pickup [KIA]

The team-up also offers Hyundai a breakthrough into the U.S. pickup truck market — a segment it has targeted for decades but has not yet successfully entered.

Dubbed as the Chicken Tax, the U.S. government has been imposing a steep 25 percent tariff on imported pickup trucks to protect domestic manufacturers since 1964. Local brands like Ford Motor and GM dominate roughly 80 percent of the U.S. pickup market.

Kia launched the Tasman pickup last year but hasn’t yet released it in the U.S. market due to the tariffs.

From GM’s standpoint, the partnership could present a strategic remedy to lingering speculation over a potential withdrawal from Korea after the United States' 15 percent tariff on Korean products.

GM Korea manufactures compact models such as the Chevrolet Trailblazer and Trax, with approximately 85 percent of production exported to the United States.

“Hyundai’s strategic collaboration with GM will help us continue to deliver value and choice to our customers across multiple vehicle segments and markets,” said Hyundai Motor CEO José Muñoz.

“Our combined scale in North and South America helps us to more efficiently provide our customers more of what they want — beautifully designed, high-quality, safety-focused vehicles with technology they appreciate.”

BY SARAH CHEA [[email protected]]