Hyundai Motor Group signs supply chain pact to build AI, robotics ecosystem

Hyundai Motor Group is strengthening supply chain cooperation to prepare for the shift toward AI, robotics and software-defined vehicles. The group plans to improve the financial stability of its suppliers while expanding technology and education support in AI, electrification and autonomous driving — all aimed at building a future mobility ecosystem.

The group held a "Hyundai Motor Group Mutual Cooperation Agreement Signing Ceremony" on Tuesday at the DoubleTree Hotel in Pangyo, Seongnam, Gyeonggi Province. Korea Fair Trade Commission Chairman Ju Byung-gi and other commission officials attended, along with Seo Gang-hyun, president of Hyundai Motor Group's planning and coordination division. Representatives from 12 group affiliates — Hyundai Motor, Kia, Hyundai Mobis, Hyundai Steel, Hyundai E&C, Hyundai Rotem, Hyundai Engineering, Hyundai Transys, Hyundai Wia, Hyundai Autoever, Hyundai Kefico and Innocean — as well as officials from more than 150 tier-1 and tier-2 suppliers also took part.

Hyundai Motor Group is pursuing a range of future businesses, including AI, software-defined vehicles, autonomous driving, robotics, advanced air mobility, hydrogen energy and smart factories. Suppliers are consequently taking on a broader role as supply chain partners helping prepare for the industrial transition, rather than serving merely as transactional counterparts.

In his congratulatory remarks, Fair Trade Commission Chairman Ju said innovation in the future mobility industry "can be sustained more firmly on the foundation of healthy collaboration and mutual growth with suppliers," adding that Hyundai Motor Group's initiative marks "a starting point for our economy's transition to an advanced economic system."

Seo said the competitiveness of suppliers is the competitiveness of Hyundai Motor Group itself, and that the entire supply chain must be healthy for the group to survive in global markets. "We will pool the group's capabilities to ensure that suppliers are not left behind during the transition to electrification, autonomous driving, robotics and software-defined future mobility," he said.

To stabilize suppliers' operations, the group will improve payment terms, settling invoices within an average of 10 days — well ahead of the legally required 60-day limit. The group also plans to combine education, monitoring and incentives to encourage tier-1 suppliers to pay their tier-2 counterparts earlier.

The group will also expand use of its mutual-payment settlement system, which allows suppliers to convert receivables into cash early by leveraging the credit standing of large companies. Hyundai Motor Group intends to incorporate tier-1 suppliers' use of the system into performance evaluations and incentive schemes, encouraging its adoption down to tier-2 and tier-3 suppliers.

The Fair Trade Commission plans to actively support the agreement's implementation by providing incentives to participating companies and gathering feedback from suppliers on difficulties arising from the improved payment terms.

Education, technology and financial support will also be strengthened to build suppliers' capacity for the future. Hyundai Motor and Kia will run training programs covering SDV, electrification and autonomous driving technology transitions, as well as AI and software, ESG (environmental, social and governance), carbon neutrality and cybersecurity. Hyundai Mobis will develop advanced-parts suppliers in line with its robotics business expansion, while Hyundai Rotem will support the training of manufacturing technology talent.

Hyundai Autoever will operate welfare programs including AI education and certification support, and will expand assistance to strengthen suppliers' software capabilities. Hyundai Wia will broaden the foundation for overseas expansion through import-export certification, while Hyundai Kefico will offer royalty-free patents, improve interest rates on its co-growth fund and support youth hiring. Hyundai Steel will operate a co-growth fund and provide training on supply-price indexing, and Hyundai Transys will offer ESG response consulting.

Hyundai E&C plans to expand awards for outstanding site managers and safety incentives, while Hyundai Engineering will allocate safety management costs above the legal minimum to raise on-site safety standards. Innocean will support suppliers' employees with AI subscription fees, operate a technology-data escrow system and pay design fees to unsuccessful bidders, bolstering digital capabilities and intellectual property protection.

A Hyundai Motor Group official said the group will work to raise the overall technology level of the supply chain by improving supplier competitiveness, and will grow the future industrial ecosystem together with its suppliers. "We will continue to provide practical support so that a fair and sustainable culture of mutual cooperation can spread throughout the supply chain," the official said.

Meanwhile, at a national briefing on advanced industrial development in the Yeongnam region, held recently in Jinju, South Gyeongsang Province and presided over by President Lee Jae-myung, Hyundai Motor Group announced plans to invest 42 trillion won ($27.4 billion) in the region over the next decade. The investment covers five areas: building a manufacturing hub for AI-based advanced self-driving cars, establishing a future core-parts cluster, driving AI-based production innovation in manufacturing, developing future aviation and space technology, and building sustainable energy infrastructure.