Hyundai Transys to supply transmissions to Stellantis

[Courtesy of Hyundai Transys]

Hyundai Transys Inc., an auto parts unit of South Korea’s Hyundai Motor Group specializing in power trains and seats, will supply its transmissions to Stellantis NV, the world’s fourth-largest automaker by sales, for the first time. Transmissions are Hyundai Transys’ flagship product that transfers power from the engine to the wheels.

This will also be the first large-scale supply of transmissions to a global brand other than Hyundai Motor Co. and Kia Corp. since Hyundai Transys’s founding.

According to multiple industry sources on Sunday, Hyundai Transys has signed a transmission supply contract with Stellantis, which owns various brands such as Jeep, Chrysler, Peugeot, Fiat, and Citroen, and started mass production of parts at its factory in the United States. The scale of the supply is known to be 700 billion won ($51.67 billion).

Jeep, Stellantis’ sport utility vehicle (SUV) brand, will be the first to install the Hyundai Transys transmissions.

Transmissions, a key component of the drivetrain that is critical for driver safety, are known to have high market entry barriers. Given the nature of the automotive industry, transmission companies must pass rigorous quality tests by automakers before entering long-term supply contracts.

Analysts say that Hyundai Transys’ first deal with Stellantis Group has increased its potential for business expansion. Starting with the supply of transmissions for Jeep’s internal combustion engine SUV models, the company could expand its supply to hybrid SUVs and electric drive systems moving forward and Jeep aims to expand its electric offerings to include hybrid and full electric vehicles in the mid to long term. Based on the experience and trust built with Jeep, Hyundai Transys is likely to win orders from other automotive brands under Stellantis.

Analysts also note that Hyundai Transys’ global orders outside of Hyundai Motor and Kia are about to increase, indicating its accelerated sales growth in the non-captive market.

Hyundai Transys is the only company in the world that produces a full range of transmissions, including automatic, manual, continuously variable, and hybrid. While Hyundai Motor and Kia are still its biggest customers, the company has recently been aggressively expanding its global business.

The automotive powertrain business, including transmissions, accounts for about 65 percent of the company’s entire sales and seats 35 percent. Sales topped 10 trillion won in 2022 on the back of Hyundai Motor and Kia’s external growth and the diversification of global orders.

Hyundai Transys is expanding its global business at 33 production, sales, and research and development centers in 11 countries, including 10 in the Americas, seven in China, three in India, and four in Europe. The company was formed in 2019 through the merger of Hyundai Dymos, Inc. and Hyundai PowerTech Co. It produces automotive powertrains and seats and ranks seventh in sales among Hyundai Motor Group affiliates.