Payment date moved up by as much as 23 days
Tier-1 suppliers urged to pass on early payments to lower tiers
"We will build a mutually beneficial ecosystem," company says
Hyundai Motor Group said Wednesday that it will pay 2.26 trillion won ($1.68 billion) in outstanding supplier invoices ahead of the Chuseok holiday. The payment date will move up by as much as 23 days from the original schedule.
The early payment plan involves major group affiliates -- Hyundai Motor, Kia, Hyundai Mobis, Hyundai E&C, Hyundai Steel, Hyundai Glovis, Hyundai Transys, Hyundai Wia, Hyundai Autoever, Hyundai Rotem, Hyundai Engineering and Hyundai Kefico. It covers roughly 6,000 suppliers that provide parts, raw materials and consumables.
The early payment plan aims to ease the financial burden on suppliers, who face a concentration of expenses such as employee bonuses and raw material costs ahead of Chuseok. It is designed to help stabilize their operations and support local economic activity.
Hyundai Motor Group also recommended that its tier-1 suppliers make early payments to their own tier-2 and tier-3 suppliers. The company said the move would reduce financial uncertainty further down the supply chain. It also aims to create a virtuous cycle that spreads the benefits of early payment across the entire supplier network.
The group has made early supplier payments before the Lunar New Year and Chuseok holidays every year to help ease suppliers' cash flow difficulties. It paid 2.02 trillion won early ahead of last year's Chuseok and 2.08 trillion won ahead of this year's Lunar New Year holiday.
In addition, Hyundai Motor Group employees are taking part in a range of community outreach activities. Centered on business sites nationwide, they plan to deliver goods and meals to vulnerable groups, volunteer their time, and support traditional markets and local farms.
Employees at Hyundai Motor, Kia and Hyundai Mobis will deliver donations and needed goods to partner organizations and vulnerable groups, and volunteer at welfare facilities.
Hyundai Motor's Ulsan plant is helping revitalize local traditional markets. In July, it launched the "win-win market project" with the Ulsan Metropolitan Government, a collaboration linking companies with traditional markets. As a follow-up, the plant will hold a shopping event at Hogye Market in Buk-gu, Ulsan, and donate the purchased goods to low-income households and welfare facilities.
Hyundai Steel, Hyundai E&C, Hyundai Rotem, Hyundai Transys and Hyundai Glovis will provide holiday gifts and meals to low-income households and elderly residents in need. They will also carry out meal service volunteering and food donations.
Hyundai Autoever, working with the Seoul Council on Social Welfare, will purchase apples, tangerines and pears from farms that are difficult to sell commercially. It will process them into more than 40,000 bags of fruit chips and distribute them to about 6,600 vulnerable households.
Hyundai Wia, using a fund for cooperation between farming and fishing communities, will hold "Ieum Market," a direct-trade market connecting farms in Changwon, South Gyeongsang Province, with employees. It will purchase local agricultural products to donate to vulnerable groups.
"As Chuseok approaches and cash demand peaks, we plan to make early payments to suppliers and carry out employee volunteering, along with support for traditional markets and local farms," a Hyundai Motor Group official said. "We will continue working to build a mutually beneficial ecosystem where we grow together and share value with our suppliers and local communities."
Meanwhile, Hyundai Motor Group has continued various corporate social responsibility activities. It recently provided "nano cooling film" for two police buses belonging to the 1st Mobile Unit at the Seoul Metropolitan Police Agency's mobile unit headquarters. The advanced material lowers interior vehicle temperature simply by being applied to windows.
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