Procurement Central to Hyundai and GM's Sustainable Shift
Hyundai Motor Company and General Motors (GM) have revealed plans for numerous jointly-developed vehicles, marking a key collaborative initiative in automotive procurement.
The proposed development of five vehicles not only seeks to optimise production efficiency but also aligns with broader sustainability goals within their supply chains.
Targeting diverse markets
The strategic development encompasses four vehicles for Central and South America, including a compact SUV, a car and two types of pick-up trucks.
The flexibility of these models to use either internal combustion or hybrid systems highlights a shift towards adaptive and sustainable vehicle technology, an essential angle for procurement professionals to consider. Additionally, a significant milestone is the planned co-development of an electric commercial van for the North American market.
The initiative demonstrates Hyundai’s leadership in compact vehicle and electric van development, while GM focuses on the mid-size truck platform.
The shared platforms allow both companies to maintain distinct brand identities in design – a crucial consideration for procurement strategy and brand differentiation.
José Muñoz, President and CEO of Hyundai Motor Company, says: “Hyundai’s strategic collaboration with GM will help us continue to deliver value and choice to our customers across multiple vehicle segments and markets.”
The collaboration is expected to scale production to achieve over 800,000 units in annual sales, an impressive target that will impact procurement planning and execution.
Sustainable practices through innovation
In a bid to strengthen sustainability within their production processes, Hyundai and GM have proposed collaboration on low-carbon emissions steel.
This initiative extends to sourcing strategies, encompassing materials, transportation and logistics in North and South America.
The cooperative effort illustrates a significant opportunity for procurement executives to engage in cost-effective and sustainable sourcing initiatives.
Shilpan Amin, GM’s Senior VP and Global Chief Procurement and Supply Chain Officer, adds: “By partnering together, GM and Hyundai will bring more choice to our customers faster and at lower cost.”
As Hyundai and GM explore raw materials, components and systems to support efficient and sustainable operations, procurement professionals have the opportunity to drive innovation in sustainable supply chain practices.
Planning for a sustainable future
Both Hyundai and GM are committed to reducing emissions and accelerating the adoption of electrified vehicles.
Hyundai targets net-zero emissions by 2045, with an ambitious plan for two million EV sales annually by 2030.
This involves the launch of 21 new models and expansion of hybrid and hydrogen vehicle technologies, all presenting further opportunities for innovative procurement practices.
Meanwhile, GM's agenda includes eliminating tailpipe emissions from new light-duty vehicles by 2035 and achieving carbon neutrality by 2040. Supported by a US$35bn investment in its Ultium battery platform, GM aims for 50% of its fleet to be electric by 2030.
The ongoing design and engineering work establishes a foundation for the vehicles set to launch in Central and South America by 2028.
Concurrently, the electric commercial van’s production is anticipated to begin in the US that same year, making it imperative for procurement departments to prepare for these upcoming shifts.
Underlying these developments is the September 2024 framework agreement, which focuses on collaboration across various propulsion systems, from internal combustion engines to hydrogen fuel cells, paving the way for procurement to engage with diverse technology platforms and sustainable practices.
