U.S. Tariffs Hit Hyundai Hard

Hyundai Motor Launches Task Force to Respond to U.S. Tariffs The South Korean automaker Hyundai Motor has launched a task force to respond to the growing threat of U.S. tariffs, which are expected to significantly impact its sales and profitability.

Production Shifts and Tariff Mitigation

Hyundai has announced that it will shift the production of some Tucson crossovers from Mexico to the United States, in a bid to minimize the impact of U.S. tariffs. The company has also established a task force to assess the impact of the tariffs and develop plans to increase local sourcing of car components in the United States.

• Some 16,000 Tucson crossovers are made in Mexico last year.
• The shift of production to the United States is relatively small, but it is a significant step towards reducing the company’s dependence on Mexican production.

Annual Earnings Targets Reaffirmed

Despite the challenges posed by the U.S. tariffs, Hyundai has reaffirmed its annual earnings targets, including revenue growth of 3-4% and an operating profit margin of 7.0-8.0%. The company’s operating profit for the first quarter rose 2%, reaching 3.6 trillion won ($2.5 billion).

Revenue Growth	Operating Profit Margin
3-4%	7.0-8.0%

U.S. Vehicle Sales Jump** Hyundai’s U.S. vehicle sales jumped 11% in the first quarter, driven by consumers rushing to buy vehicles ahead of the auto tariffs. Retail sales rose 1% in the first quarter, but the company plans to keep sticker prices on its current model lineup steady till June 2.

Electric Vehicle Cooperation

Hyundai and General Motors are in talks to cooperate in various areas, including electric commercial vans and pickup trucks in North America. The company hopes to announce detailed plans “in the not-too-distant future.”

Trade Package and Tariff Exemptions

South Korea and the United States have agreed to craft a trade package aimed at removing new U.S. tariffs before the pause on reciprocal tariffs is lifted in July. Hyundai has asked for some exemptions from the tariffs, particularly in the auto sector.

“Seoul has asked for some exemptions from the tariffs and had highlighted the auto sector, which is particularly vulnerable,” said Finance Minister Choi Sang-mok.

Favorable Currency and Operating Profit

Hyundai’s operating profit for the first quarter was boosted by a weaker South Korean won and a 40% surge in sales of hybrid vehicles.