Korea Fair Trade Commission (KFTC) held a mutual growth agreement ceremony with Hyundai Motor Group and its suppliers on the 7th at DoubleTree by Hilton in Pangyo. The agreement focuses on improving payment terms and expanding future mobility technology support for suppliers. This marks the fourth such agreement facilitated by KFTC among major South Korean conglomerates, following similar partnerships with Samsung, SK, and LG groups.
Hyundai Motor Group Commits to 10-Day Payment Terms for First-Tier Suppliers
Hyundai Motor agreed to pay first-tier suppliers within an average of 10 days after the payment deadline. The company will increase its cash settlement ratio and expand use of its win-win payment system, including early payment practices during holiday periods. First- and second-tier suppliers committed to shortening payment deadlines, raising cash settlement ratios, and expanding win-win payment system usage for lower-tier suppliers. Hyundai Motor will provide incentives to suppliers participating faithfully, including enhanced scoring and bonus points in supplier evaluations, preferential support from mutual growth funds, and awards for outstanding suppliers.
12 Hyundai Affiliates and 150 Representatives Participate in Agreement Ceremony
The ceremony included KFTC Chairman Ju Byung-ki and representatives from 12 Hyundai Motor Group affiliates: Hyundai Motor, Kia, Hyundai Mobis, Hyundai Steel, Hyundai Engineering & Construction, Hyundai Rotem, Hyundai Engineering, Hyundai Transys, Hyundai WIA, Hyundai AutoEver, Hyundai Kefico, and Innocean. A total of 150 executives and employees from first- and second-tier suppliers attended.
Technology Support Programs Target AI and Autonomous Driving Transition
Hyundai Motor and Kia will support suppliers' transition to artificial intelligence (AI), software, and autonomous driving technologies. The companies plan to provide AI and cybersecurity training programs for supplier employees. Hyundai Mobis announced plans to cultivate suppliers specializing in advanced components in line with its robot business expansion.
5,500 Suppliers Expected to Benefit from Agreement Terms
Approximately 5,500 suppliers in Hyundai Motor's supply chain are expected to benefit from this agreement. Hyundai Motor will incorporate the key agreement terms into fair trade agreements with suppliers to be signed in early next year. KFTC Chairman Ju Byung-ki stated that inequality and polarization are the most critical obstacles to South Korea's economic development, emphasizing that innovation in the future mobility industry can be sustained through healthy collaboration structures and mutual growth with suppliers. KFTC will monitor agreement implementation through fair trade agreement performance evaluations and provide incentives to outstanding companies, while continuing to encourage mutual growth agreements between large corporations and suppliers.
FAQ
What did Hyundai Motor Group agree to on the 7th?
Hyundai Motor Group signed a mutual growth agreement with suppliers at a ceremony held by Korea Fair Trade Commission on the 7th at DoubleTree by Hilton in Pangyo, committing to pay first-tier suppliers within an average of 10 days after payment deadlines and increase cash settlement ratios.
How many suppliers will benefit from the Hyundai Motor agreement?
Approximately 5,500 suppliers in Hyundai Motor's supply chain are expected to benefit from the agreement, which includes improved payment terms, technology support for AI and autonomous driving transitions, and training programs for supplier employees.
