25-04-2025
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.
