Hyundai launches tariff task force, shifts some Mexico output to the US
Hyundai said on Thursday it has launched a task force to respond to US tariffs, adding production of some Tucson crossovers has been shifted from Mexico to the US.
It is also considering whether to move production of some US-bound cars from South Korea to other locations, the carmaker said as it reported a 2% rise in first-quarter operating profit and reaffirmed its annual earnings targets.
Hyundai and affiliate Kia, which together are the world's third-biggest carmaking group by sales, are particularly vulnerable to US tariffs.
They generate about one-third of their global sales from the US market and imports account for roughly two-thirds of their US car sales, according to data from Korea Investment & Securities.
"We expect a challenging business outlook to continue due to intensifying trade conflicts and other unpredictable macroeconomic factors," Hyundai said.
The task force, launched this month, will seek to minimise the impact of US tariffs on its finances and will craft plans to increase local sourcing of car components in the US.
President Donald Trump's administration has slapped 25% tariffs on automobiles since April 2 and plans to impose tariffs of 25% on car parts no later than May 3, which threaten to hike vehicle prices and cut car sales.
Later on Thursday, South Korea and the US agreed to craft a trade package aimed at removing new US tariffs before the pause on reciprocal tariffs is lifted in July.
Finance minister Choi Sang-mok said Seoul has asked for some exemptions from the tariffs and had highlighted the car sector, which is particularly vulnerable.
Hyundai's task force comes on top of a $21bn (R396,117,670,200) investment plan for the US announced last month by the wider Hyundai group with Trump at the White House. As part of the plan, Hyundai has pledged to boost production at its new Georgia factory, but any ramp-up in US output will take time and tariffs could cost the group billions.
The shift of some Tucson production to its Alabama factory, while significant, is relatively small, with 16,000 vehicles made in Mexico last year.
Other measures taken include frontloading some vehicle shipments to the US, which has led to 3.1 months of inventory in North America.
Hyundai plans to keep sticker prices on its model lineup steady until June 2 and manage prices flexibly afterwards.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
TimesLIVE
2 hours ago
- TimesLIVE
China's rare-earth clampdown could stall carmaker output
Global auto executives are sounding the alarm on an impending shortage of rare-earth magnets from China — used in everything from windshield-wiper motors to anti-lock braking sensors — that could, in a worst-case scenario, force the closure of car factories within weeks. In a previously unreported May 9 letter to officials in the administration of US President Donald Trump, the head of the trade group representing General Motors, Toyota, Volkswagen, Hyundai and other major carmakers raised urgent concerns. 'Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras,' the Alliance for Automotive Innovation wrote. The letter, which also was signed by the Motors & Equipment Association (Mema), , added that, without those essential automotive components, it would only be a matter of time before US vehicle factories are disrupted. 'In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines,' the groups said. Both Alliance CEO John Bozzella and Mema CEO Bill Long told Reuters on Friday the situation was not resolved and remained a concern. They expressed gratitude for the Trump administration's high-level engagement to prevent disruption to US car production and the supply chain. Bozzella noted that the automotive issue was on the agenda during Treasury secretary Scott Bessent and US trade representative Jamieson Greer's talks with their Chinese counterparts in Geneva earlier this month. Greer told CNBC on Friday that China had agreed to lift restrictions on the exports of rare-earth magnets to US companies but was not moving fast enough to grant access for key US industries. 'We haven't seen the flow of some of those critical minerals as they were supposed to be doing.' China — which controls more than 90% of global processing capacity for the magnets used in everything from cars and fighter jets to home appliances — imposed restrictions in early April, requiring exporters to obtain licences from Beijing. Rare-earth magnet exports from China halved in April as companies grappled with an opaque application process for permits that sometimes requires hundreds of pages of documents. In a social media post Friday, Trump accused China of violating the terms of a deal reached this month to temporarily dial back tariffs and other trade restrictions. 'China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,' Trump said in a post on his Truth Social platform. China's embassy in Washington responded by saying it was the US that was abusing export controls in the semiconductor sector. A US official with knowledge of the talks told Reuters that only tariffs and Chinese non-tariff countermeasures were covered in Geneva talks, and that US export controls were not part of the deal. The official also expressed frustration that Beijing appeared to be moving slowly on promises to issue rare-earth export licences, which could kick-start export control retaliation by Washington if carmakers vulnerable to shortages of the minerals are forced to halt production. While a handful of licences have been granted, including to some Volkswagen suppliers, Indian carmakers say they still have received none and will have to stop production in early June. German car parts maker Bosch said this week that its suppliers have been bogged down by China's more rigorous procedures to receive export licences. A Bosch spokesperson described the process as 'complex and time-consuming, partly due to the need to collect and provide a lot of information'.
IOL News
3 hours ago
- IOL News
Buy now or miss out: Johannesburg property market heats up
As interest rates decline, Johannesburg's property market is heating up, presenting a golden opportunity for buyers and investors. Don't get left behind—find out why experts are urging immediate action! Image: Karen Sandison / Independent Newspapers In a decisive move that could reshape the real estate landscape in Johannesburg, the South African Reserve Bank has cut interest rates by 25 basis points, bringing the home loan interest rate to an unprecedented low of 10.75%—the most favourable level since February 2023. This announcement has sparked urgent calls from property experts for prospective buyers and investors to act swiftly in this buoyant market. Denese Zaslansky, CEO of FIRZT Realty Group, emphasised the growing momentum in property demand since rates began to decline in September last year. 'We have witnessed a remarkable 38% surge in sales and an average price increase of 6% over the past six months,' she noted, pointing out that desirable locations in Johannesburg are already seeing diminishing stock levels. The implications of today's rate cut are significant for both first-time buyers and seasoned investors. Given that the current average home price in the city is approximately R1.6 million, qualifying for a home loan currently requires a gross monthly income of about R54,200. This figure is R3,600 less than it was this time last year, offering a golden opportunity for many who may have previously felt locked out of the market. Zaslansky warns, however, that time is of the essence. 'If property prices rise by just 5% in the next year, prospective buyers will face higher monthly bond repayments and will need to increase their monthly income by R2,700 to qualify for a home loan, should interest rates remain stable. This will erode the advantages gained from the recent rate cuts,' she cautioned. Today's interest rate decline comes in response to inflation metrics consistently lingering below the Reserve Bank's target range of 3% to 6%. With inflation reported at 2.8% in April, and economic growth failing to gain real traction, the decision reflects a broader shift aimed at boosting consumer confidence and justifying spending amid turbulent market conditions. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading According to Zaslansky, a turnaround is imminent. 'We are highly optimistic that we will see rapid advancements in the property market as demand escalates. The number of new developments sprouting across Johannesburg is a clear indicator of rising investment in property, stimulating both job creation and overall economic growth in the region.' With the property market in Johannesburg offering rare opportunities for savvy buyers, Zaslansky's message is clear: the time to act is now. Ignoring this window may mean relinquishing the chance to secure a home at today's favourable rates and prices—an opportunity that may not last long as the market continues to evolve. BUSINESS REPORT
TimesLIVE
3 hours ago
- TimesLIVE
S&P cuts outlook on Volvo over tariffs, China competition
S&P on Friday lowered the outlook for its BB+ credit rating on Volvo Cars to "negative" from "stable", saying US tariffs and tougher competition in China were hurting the company's growth prospects. The Sweden-based carmaker, majority-owned by China's Geely, last month withdrew its earnings guidance and announced cost cuts which will include laying off about 3,000 mostly white-collar workers amid a slowdown in demand. "The negative outlook on Volvo Cars reflects its large exposure to US import tariffs and the increasing marginalisation in the Chinese market," S&P said. "We expect Volvo Cars' profitability and cash generation after investments to come under pressure in 2025-2026, partly alleviated by a substantial cost reduction programme." The USs represented 16% of Volvo Cars sales in 2024, while China accounted for 20%. Volvo Cars produces only one of its models in the US, and relies on imports for the rest, leaving the company more exposed to US tariffs than many of its European peers. S&P said a proposed 2027 US ban on carmakers controlled by a Chinese entity also weighed on the outlook. In the most recent twist in the trade turmoil sparked by President Donald Trump, a US court on Thursday temporarily reinstated sweeping new tariffs, a day after another US court had ordered an immediate block on them.
