GM, Hyundai to Co-Develop 5 Vehicles to Take on Chinese Rivals
By Reuters | 06 Aug, 2025

Competition from Chinese companies targeting the Latin and South American markets has brought together the world's 3rd and 6th largest automakers by volume in joint development projects.

General Motors and Hyundai Motor on Wednesday outlined plans to develop five vehicles as they seek to lower costs amid growing competition from nimble Chinese rivals.

Four of the vehicles — a compact SUV/car/ pickup, and a mid-size pickup — are targeted at Central and South American markets and will support both internal combustion and hybrid powertrains.

At full production scale, the companies expect to roll out at least 800,000 vehicles annually.

The partnership will help GM compete against rising Chinese players in the Latin American market, where the Detroit automaker has had a strong presence for decades.

The two global automakers will also co-develop an electric commercial van for the North American market. Reuters in March reported that the two companies were nearing a deal to share two commercial electric vans.

Global automakers face stiff competition from Chinese EV makers and a trade war impacting imports of crucial parts, including rare earth materials, which has pushed production costs higher.

This is the first major partnership for vehicle development for Hyundai Motor. 

The deal would give GM access to hybrid technology it lacks, while enabling Hyundai to enter into new segments such as vans in North America and mid-sized pickups, Kim Sung-rae, an analyst at Hanwha Investment & Securities, said. 

The two companies did not say where the models will be produced. Hyundai, which has a factory in Alabama, said it will expand the production capacity of its new factory in Georgia. The company also has a factory in Brazil.

GM's budding partnership with Hyundai follows an unwinding of several projects the Detroit automaker had pursued with Honda over the past decade. Notably, GM and Honda in 2023 scrapped a $5 billion plan to jointly develop affordable electric vehicles.  

Chinese automakers have released several high-tech, low-cost models, putting pressure on legacy automakers such as GM to slash expenses and streamline manufacturing processes. To compete with these rivals, many automakers have explored partnerships as a way to share development costs, especially for battery-powered models.  

Cutting costs is even more pressing as tariffs have added billions of dollars in expenses for automakers around the globe. The Hyundai-GM announcement comes after the United States and South Korea last week reached a trade agreement to charge a 15% tariff on imports from South Korea, including autos.  

This is among several deals between a South Korean company and a U.S. firm announced in recent weeks, following Samsung Electronics' chip deal with Tesla and Apple, and LG Energy Solution's battery deal with Tesla.

(Reporting by Nathan Gomes and Anshuman Tripathy in Bengaluru, Nora Eckert in Detroit and Hyunjoo Jin in Seoul; Editing by Tasim Zahid and Stephen Coates)