Hyundai VS Samsung: Frenemies at the gate
By Kim Yoo-chul
It's quite one thing to be a “culturally vibrant brand” in one part of the world. It's another to radiate that vibrancy at high amplitude across the world.
Brand analysts say that means the brand has not only tapped into global shifts in values and attitudes, but also expressed itself and engaged people in ways that resonate culturally on a local level.
As the world shrinks and technologies converge, brands are advised to stay true to their roots, and do so in lots of ways that inspire, regardless of where they play, they said.
But Korea's Hyundai Motor Group, the country's top carmaker, is seemingly out of sight over its partnership with Samsung Electronics. What makes this standoff particularly interesting is while Hyundai is a good friend of Samsung on multiple fronts, the car manufacturer doesn't want Samsung to gain traction in the car industry which Hyundai believes is territory it can't yield.
On Monday, industry sources said Hyundai excluded Samsung from its suppliers' list for components in premium sedans. Hyundai is not cooperative with Samsung.
“Hyundai Motor limited the use of in-car audio systems by U.S.-based high-end sound system producer of Harman Kardon, which Samsung bought last year for $8 billion, for its brand new models. Rather, Hyundai's flagship models are equipped with such systems supplied by Krell,” one senior industry executive said.
Out of seven flagship models that Hyundai has so far released, only two have featured Harman's in-vehicle audio systems, according to the executive.
Harman's audio brands range from JBL to AKG and other premium ones. It's been available for consumers to select either of Harman's in-vehicle systems. “But since Samsung's acquisition of Harman, Hyundai is apparently cutting its reliance on Harman with Krell brand getting more orders,” the executive said.
The 2019 Hyundai Veloster is the only brand that has Harman's audio systems.
For Samsung, which identified in-vehicle business as one of its next growth engines, Hyundai's backing would be beneficial, said market analysts, as Samsung expects to have reference by supplying in-vehicle systems to the Korean carmaker.
Samsung is selling Harman's consumer audio products in Korea such as speakers, earphones and sound bars via its digital plaza outlets.
One reason is that Samsung has all the technologies to resume its car business if such plans get implemented from its board meetings.
Samsung is the world's top manufacturer of displays and memory chips _ two vital technologies to manage the car business. Samsung ran a car business in the late 1990s; however, it exited years later.
“Global carmakers are investing more for driverless vehicles and connected cars with the help of technology companies such as Google and Cisco. By reflecting on this, if Hyundai helps Samsung and vice versa, then that does make sense; however, Hyundai is worrying over Samsung's market entry in the car industry,” another industry executive said by telephone.
A Samsung Electronics spokesman said the company is working on various “next business projects” with Hyundai, but didn't elaborate further.