General Motors (GM) and Hyundai Motor (HYMLF) revealed plans to co-develop five vehicles to cut costs and better compete with rapidly rising Chinese automakers. The partnership will help GM fight against growing Chinese rivals in Latin America, a region where the company has been strong for many years.
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The Hyundai-GM announcement follows last week’s trade deal between the U.S. and South Korea, which includes a 15% tariff on South Korean imports, such as automobiles. Although the production location is not confirmed, making the vehicles in the U.S. would help Hyundai avoid the tariff and cut costs. Both companies aim to roll out at least 800,000 vehicles annually once full production is reached.
GM, Hyundai to Build 5 New Vehicles
Within this partnership, GM and Hyundai will jointly design four vehicles for Central and South America, with launches set for 2028. This includes a compact SUV, a sedan, a pickup, and a midsize pickup with adaptable powertrains for either internal combustion or hybrid systems. Additionally, the two automakers will build an electric commercial van for the North American market, also scheduled for 2028.
Meanwhile, GM will take charge of developing the midsize pickup, while Hyundai will lead efforts on the compact car and electric van.
GM-Hyundai Tie-Up Gets Mixed Reactions
The collaboration aims to strengthen GM and Hyundai’s position against rising competition from Chinese EV makers in Latin America. However, some experts remain skeptical about whether the alliance will generate significant synergies.
Commenting on the partnership, An Hyung-jin, Chief Investment Officer at Seoul-based Billionfold Asset Management, said surpassing Chinese EV makers will be challenging, given their dominant market share and aggressive pricing. While Hyundai could gain from GM’s expertise in pickup trucks, he noted that translating that into profits may take time.
Meanwhile, Teddi Kim, head of auto research at Mirae-Mobility Research & Services, described the collaboration as a “win-win strategy” for both companies. He noted that GM can benefit from Hyundai’s hybrid technology, while Hyundai can leverage the alliance in trade negotiations with the U.S.
Is GM Stock a Good Buy Now?
Analysts remain cautiously optimistic about GM stock, with a Moderate Buy consensus rating based on 12 Buys, four Holds, and two Sells. The average GM stock price target is $58.44, suggesting an upside potential of 11.4% from its current price.
