April 25, 2024

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[THE INVESTOR] Harman International CEO Dinesh Paliwal visited Hyundai Motor Group’s headquarters in Seoul on Nov. 22 to soothe the crucial client’s possible concerns over its recent acquisition deal with Samsung Electronics.

Samsung announced on Nov. 14 that it would acquire the US audio systems giant that has been betting big on connected car solutions for US$8 billion -- its largest-ever purchase. 

Harman's infotainment system in 2017 Hyundai Santa Fe

The Harman CEO is visiting Seoul this week to discuss details of the deal with Samsung Vice Chairman Lee Jae-yong.

Hyundai, the nation’s largest carmaker and the fifth globally, has been paying keen attention to the high-profile tie-up.

Harman supplies its infotainment and audio systems to both Hyundai and Kia brands. Samsung, its compatriot rival, has been absent from the car industry since the late 1990s when the two competed to acquire the then cash-strapped Kia Motors. 

A Hyundai official confirmed the Harman CEO met key executives, including Kia Motors Vice Chairman Lee Hyoung-geun, saying: “The change in ownership will not affect our partnership with Harman."

In a press conference on Nov. 21, Paliwal also reiterated that the company’s alliance with Samsung was about connected car solutions, not about making cars.

“I visited many key automotive clients globally, including Hyundai. The reaction was very positive,” Paliwal said of possible resistance from carmakers about the acquisition deal. “They are excited to see our synergy. We made sure that we wanted to become the tier-1 solutions provider and we do not want to enter into car-making.”

Industry watchers say it seems unavoidable for Samsung and Hyundai to compete head-on in the long term as they are pouring considerable resources into connected car solutions that aim to connect cars, smartphones and other appliances via the internet.

Hyundai has also been actively tying up with global partners such as Cisco Systems, the US tech giant. The company recently signed a deal to establish a big data center in Guizhou Province, China, in cooperation with the provincial government.

The camaker is also developing its own automotive operating system to be deployed in its future car models from 2020.

By Ahn Sung-mi (sahn@heraldcorp.com)