Hyundai Motor has reportedly agreed to pay as much as 20% more to its suppliers for parts.

Auto Business News said that the company has agreed to pay a higher price because of higher steel prices, which increases manufacturing costs. According to Song Mee Young, Hyundai spokeswoman, the price hike will be retroactive from February 1, 2008.

The higher prices paid to suppliers may weaken chances of the company's plans to reduce costs by 20% by 2009, the report added.