Or is this a way to secure the transition to Siemens NX?

What CAD solutions does the South Korean automotive giant Hyundai use? That question is brought to the forefront by this week’s announcement from the French PLM developer Dassault Systèmes, which announced that it had received a five-year extension on a thirty-year agreement with the automotive company regarding its CAD solution CATIA.

How does this tie in with my earlier reports that Hyundai and subsidiary Kia are phasing out CATIA and replacing it with Siemens Digital Industries Software’s CAD flagship NX?

A deal that still stands. This picture is from a ceremony when Siemens Digital Industries Software and Hyundai Motor Company signed a Memorandum of Understanding (MOU) that the car developer chose to exchange its CATIA CAD system for Siemens NX. “Selecting NX software and the Teamcenter portfolio from Siemens’ Xcelerator portfolio for our core design and data management platforms will introduce a new working environment for our teams that will pave the way for a leap forward in future car development,” said Albert Bierman (left), head of the R&D Division at Hyundai Motor Company. “This is the beginning of a huge transformation and an important point of change for Hyundai Motor Company and with Siemens as our trusted partner we will work together to achieve our goals through mutual cooperation and teamwork.” To the right is Bob Jones, Siemens EVP of Global Sales and Customer Success. (Image courtesy of Siemens Digital Industries Software.)

Dassault’s announcement does not necessarily mean that Hyundai has decided not to change CAD systems. In fact, the extension does not necessarily change anything with respect to the joint development of CAD, PLM and cPDm (collaborative Product Definition management) tools that Hyundai previously agreed to with Siemens. How is that?

A Swap of This Magnitude Doesn’t Happen Over Night

Replacing a CAD system in an OEM company such as Hyundai, which serves a complex industry like automotive, is not something that happens in the blink of an eye. In its Memorandum of Understanding (MOU) with Siemens, it appears that Hyundai will implement this change. But the point is that changes of this magnitude and scope take time. According to my previous calculations on this deal—based on the size of R&D and other related departments in the Hyundai KIA Motors group—we are talking about at least 5,000 and perhaps as many as 6,000 users of Siemens’ CAD and cPDm systems (NX and Teamcenter).

“Through this partnership, Dassault Systèmes will continue to provide the best support to Hyundai Motor with technology and know-how to help it take a leading position in the global automobile market as well as in new business,” says Dassault’s EVP of Asia Pacific, Samson Khaou, commenting on the new five-year extension. The question, however, is if this means more than Hyundai securing accessibility to its old system? (Image courtesy of Dassault Systèmes.)

You simply cannot assume that during the transition period you will not need the old system, in this case CATIA for CAD and ENOVIA on the cPDm side. Think of all the implementation, education, training and process changes that the new PLM environment needs. It will take years. During this time, Hyundai will need access to the systems that it has spent the last 30 years building up.

In this situation, increasing the availability of Dassault’s products over a five-year period seems to be a wise move.

A Long Standing Partner

So what have Dassault and Hyundai agreed upon? According to the press material:

“Through this agreement, Hyundai Motor expects to help its diverse partners locally and globally by being able to foster their seamless collaborative technology relationships. Dassault Systèmes is recognized as a long-standing growth partner of Hyundai Motor. It has contributed to the development of vehicles and related technologies by providing CATIA and technical support to Hyundai Motor for the past 30 years.”

It continues with this carefully worded paragraph: “CATIA, which is currently used by the technical center of Hyundai Motor group located in several countries, is a solution used for designing the entire production process in a 3D model, from the initial idea planning stage to design, analysis and assembly. CATIA has contributed to shortening Hyundai Motor’s product development process and reducing its costs.”

In the same press release, Samson Khaou, EVP of Dassault Asia-Pacific, commented on the deal. “The extension of our agreement with Hyundai Motor takes place at a time when the mobility industry in Korea is accelerating toward the electrification of vehicles. This has significant implications for helping the related industry prepare for new changes in a more stable way,” said Khaou. “Through this partnership, Dassault Systèmes will continue to provide the best support to Hyundai Motor with technology and know-how to help it take a leading position in the global automobile market as well as in new business.”

In my interpretation, there is nothing in the release that changes the previous agreement with Siemens. Notably, there is no statement from official Hyundai representatives, which is customary.

Moreover, the press release does not mention the numbers of seats or implementation of the new 3DEXPERIENCE V6 platform, which would be expected if the buyer were upgrading and preparing its systems for the future.

My Take: A Way to Secure a Long-Term Transition to NX

My take is that the five-year “supply and maintenance agreement,” as the release calls it, simply secures Hyundai’s access to CATIA and ENOVIA during the transition period to NX.

Does it change anything in Hyundai’s long-term development towards a Siemens environment? And does the announcement from Dassault mean that it has won back a customer?

No. I would describe the whole thing as “tourniquets” after the announcement that the world’s fifth largest vehicle manufacturer group chose to change systems.