According to foreign media reports, South Korea’s Hyundai Motor Group is preparing for US President Trump’s plan to impose tariffs on cars imported to the United States. The move highlights Hyundai Motor Group’s decades of commitment to this crucial U.S. market and adopts new strategies to increase U.S. local production.
“Hyundai Motor Group is investing billions of dollars in the U.S. and creating tens of thousands of high-paying jobs in the U.S.,” Hyundai Motor CEO Jose Munoz said in a February 15 LinkedIn post. “We also passed 845 companies,” said Hyundai Motor CEO Jose Munoz.
Hyundai dealers, 788 Kia dealers and 229 Genesis dealers support the U.S. community.”
Meanwhile, Jose Munoz highlighted the role of Hyundai Motor Group’s Georgia plant, which produced more than 700,000 cars last year and is expected to create 570,000 jobs in the United States.
Jose Munoz added: “Hyundai Motor Group is a key player in industries such as mobility, construction and emerging technologies, and has invested $20.5 billion in the U.S. domestically. Hyundai Motor Group will continue to fulfill its long-standing commitment to drive the U.S. auto industry Grow and support the prosperity of the American community through influential investments.”
Recently, Trump announced that tariffs were imposed on cars imported to the United States from April 2. Although he did not specify the rate of import tariffs, industry insiders predicted that this would have a significant impact, as a large number of vehicles sold in the United States were produced and exported from South Korea. Since 2016, South Korea has used the zero-tariff policy in the US-South Korea bilateral free trade agreement to exempt passenger cars from taxes.
According to Bloomberg, imported cars accounted for about half of the U.S. auto market last year. Among them, 65% of the vehicles sold by Hyundai-Kia in the United States are imported from South Korea.
Hyundai and Kia are expected to reduce their full-year operating profit by 1.9 trillion won (about $1.3 billion) and 2.4 trillion, respectively, if Trump imposes 10% tariffs on Hyundai and Kia respectively. won. S&P Global Credit Rating Agency predicts that 20% U.S. tariffs could reduce Hyundai and Kia’s profits by up to 19%.
Faced with the threat of US automobile tariffs, Hyundai-Kia plans to increase local production capacity in the United States to 1.1 million vehicles. Hyundai Kia’s annual sales in the United States are about 1.7 million units, which means this capacity expansion plan will enable Hyundai Kia to directly meet more than half of its sales needs in the local U.S. market. Key models include at least six to seven models, such as the Ioniq 5 and Ioniq 9 electric cars, and other hybrid models.
However, experts worry that Hyundai-Kia may be affected by Trump tariffs before the expansion plan is completed. Currently, Hyundai-Kia is already facing the cost pressure of the United States to impose a 25% import tariff on raw materials such as aluminum and steel. Hyundai Motor Group is working to build a steel plant in the United States through its subsidiary Hyundai Steel to ease tariff pressures.
Kim Pil-su, a professor of automotive engineering at Daelim University in South Korea, said: “Hyundai-Kia is working to expand its production scale in the United States, but it will take some time to increase production capacity. At the same time, the Trump administration has triggered an increasing problem. Certainty could hurt Hyundai-Kia’s operations in the United States. The South Korean government should immediately launch a task force to address these issues specifically with the United States.”