Hyundai and Kia have demanded suppliers help reduce component prices by up to 10%, reported the Korea Herald.

Hyundai-Kia wants around 400 suppliers to reduce their prices from next month.

"We settle parts prices every year by discussing with individual suppliers but the average mark-down this year will be larger due to unfavourable currency rates, high oil prices and material costs," said a Hyundai Motor official, quoted by the Korea Herald.

According to the report, suppliers that have reduced production costs by redesigning components or improving their manufacturing processes would then be asked to reduce prices.

On the other hand suppliers that have increased quality would be allowed to raise prices. However, this year almost all suppliers are required to cut their prices, according to a representative of the Korean automotive parts trade association.