Hyundai Motor Group shares are surging in the aftermarket as Korea and the United States agreed on details in follow-up talks on the tariff. With the tariff on Korean-made cars exported to the United States cut to 15% from the previous 25%, Hyundai Motor and Kia are expected to see larger profits.
As of 7:50 p.m. on the 29th, Hyundai Motor shares were trading in the aftermarket at 285,500 won, up nearly 14% from the previous day. The stock finished regular trading at 258,000 won, up 2.99% that day, but gains widened on news that the Korean and U.S. leaders agreed on a trade deal.
Kia shares also extended gains by more than 10%. The stock topped 125,000 won. In regular trading that day, Kia closed at 115,800 won, up 1.94%.
Hyundai Mobis and Hyundai GLOVIS shares also extended gains after the news broke. Hyundai Mobis ended regular trading up 0.66%, but is trading at 320,000 won in the aftermarket, up more than 5%. Hyundai GLOVIS, which closed slightly lower in regular trading, turned higher in the aftermarket and is up nearly 5%.
Presidential Chief of Staff for Policy Kim Yong-beom held a briefing at the Gyeongju APEC Media Center immediately after the Korea-U.S. summit the same day and said the two countries agreed on details in the follow-up negotiations on the tariff. Under the agreement, the tariff on Korean-made automobile items will be lowered to 15%.
Since April, Korean-made cars exported to the United States have been subject to a 25% tariff. However, Japanese cars competing with Korean models have faced a 15% tariff under the U.S.-Japan trade agreement, raising concerns that Hyundai Motor and Kia would lose competitiveness. On analysis that profits would fall due to the tariff burden, Hyundai Motor Group shares had lagged even as the domestic stock market hit record highs.
Kim Jun-sung, an analyst at Meritz Securities, said, "If the tariff is set at 15%, there is no need to lower this year's earnings outlook for Hyundai Motor, and next year's outlook can be raised."
In a statement distributed after the announcement of the tariff negotiation agreement, Hyundai Motor Group said, "We thank the government for its dedicated efforts throughout the difficult negotiation process that led to the agreement," and added, "Hyundai Motor and Kia will continue to pursue various measures to minimize the impact of tariffs while strengthening fundamentals through quality and brand competitiveness and technological innovation."