Hyundai moves production of Tuscon crossovers to US
South Korean car maker sets up task force to manage tariffs and look at sourcing more parts in America
24 April 2025 - 14:35
byHyunjoo Jin, Joyce Lee and Heekyong Yang
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Seoul — Hyundai Motor said on Thursday it has launched a task force to respond to US tariffs, adding that production of some Tucson crossovers has now 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 automaker 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 car making 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 wars and other various unpredictable macroeconomic factors,” Hyundai said in a statement.
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.
US President Donald Trump’s administration has slapped 25% tariffs on cars 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.
The task force comes on top of a $21bn investment plan for the US announced last month by Hyundai Motor Group with Trump at the White House. As part of that 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 of dollars.
The shift of some Tucson production to its Alabama factory, while significant, is relatively small, with some 16,000 made in Mexico last year.
Other measures taken include front-loading 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 current model line-up steady till June 2 and manage prices flexibly afterwards.
Seoul will hold trade talks with Washington later on Thursday, hoping for a speedy resolution to tariffs on autos, one of South Korea’s key exports and a major reason for the country’s trade deficit with the US.
Kim Chang-ho, an analyst at Korea Investment & Securities, is not optimistic about a quick deal on auto tariffs unless South Korea makes big concessions.
“I see more tariff risks to autos than to other items,” he said.
Benefiting from a weaker South Korean won and a 40% surge in sales of hybrid vehicles, Hyundai booked an operating profit of 3.6-trillion won ($2.5bn) for January to March, in line with estimates and a record for a first quarter.
The weaker currency contributed 601bn won to its operating profit, offsetting the impact of increased sales incentives in the US and Europe as well as lower sales of higher-margin sport utility vehicles.
Its US vehicle sales to dealerships rose 1% in the first quarter, but retail sales jumped 11% as consumers rushed to buy vehicles ahead of the auto tariffs.
It kept its annual guidance provided in January of revenue growth of 3-4% and an operating profit margin of 7.0-8.0%.
Hyundai also said talks with General Motors to collaborate in various areas are under way, but it wasn’t able to share details because the discussions are linked to their responses to tariff policy.
It hopes to announce detailed plans “in the not-too-distant future.”
Reuters reported last month that Hyundai and GM are in talks to co-operate in electric commercial vans and pickup trucks in North America.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Hyundai moves production of Tuscon crossovers to US
South Korean car maker sets up task force to manage tariffs and look at sourcing more parts in America
Seoul — Hyundai Motor said on Thursday it has launched a task force to respond to US tariffs, adding that production of some Tucson crossovers has now 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 automaker 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 car making 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 wars and other various unpredictable macroeconomic factors,” Hyundai said in a statement.
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.
US President Donald Trump’s administration has slapped 25% tariffs on cars 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.
The task force comes on top of a $21bn investment plan for the US announced last month by Hyundai Motor Group with Trump at the White House. As part of that 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 of dollars.
The shift of some Tucson production to its Alabama factory, while significant, is relatively small, with some 16,000 made in Mexico last year.
Other measures taken include front-loading 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 current model line-up steady till June 2 and manage prices flexibly afterwards.
Seoul will hold trade talks with Washington later on Thursday, hoping for a speedy resolution to tariffs on autos, one of South Korea’s key exports and a major reason for the country’s trade deficit with the US.
Kim Chang-ho, an analyst at Korea Investment & Securities, is not optimistic about a quick deal on auto tariffs unless South Korea makes big concessions.
“I see more tariff risks to autos than to other items,” he said.
Benefiting from a weaker South Korean won and a 40% surge in sales of hybrid vehicles, Hyundai booked an operating profit of 3.6-trillion won ($2.5bn) for January to March, in line with estimates and a record for a first quarter.
The weaker currency contributed 601bn won to its operating profit, offsetting the impact of increased sales incentives in the US and Europe as well as lower sales of higher-margin sport utility vehicles.
Its US vehicle sales to dealerships rose 1% in the first quarter, but retail sales jumped 11% as consumers rushed to buy vehicles ahead of the auto tariffs.
It kept its annual guidance provided in January of revenue growth of 3-4% and an operating profit margin of 7.0-8.0%.
Hyundai also said talks with General Motors to collaborate in various areas are under way, but it wasn’t able to share details because the discussions are linked to their responses to tariff policy.
It hopes to announce detailed plans “in the not-too-distant future.”
Reuters reported last month that Hyundai and GM are in talks to co-operate in electric commercial vans and pickup trucks in North America.
Reuters
US car industry coalition warns new parts tariffs will hike prices and cut sales
Hyundai shifts some production to the US due to Trump tariffs
Hyundai’s MY25 Tucson now on sale in SA
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