U.S. President Donald Trump signed an executive order on the 26th (local time) imposing a 25% tariff on imported automobiles, raising expectations that Hyundai Motor Company and its affiliates will be hit hard. Hyundai is overcoming the crisis by expanding local investment, while its affiliates are seeking self-sufficiency by reducing their dependence on Hyundai and Kia.
According to the finished vehicle industry on the 28th, the tax rate for passenger cars and light trucks, which had been 2.5% and 25% for pickup trucks, will be unified to 25% following Trump's executive order. A 25% tariff will also be applied to major parts, including engines and transmissions. The tariff on finished vehicles will take effect before April 2, and the tariff on parts before May 3. Vehicles produced in the U.S. are exempt.
Hyundai plans to invest about 31 trillion won to increase its production capacity in the U.S. from the current 1 million units annually to 1.2 million units. Hyundai GLOVIS, responsible for the shipping volume of Hyundai and Kia, believes that the increase in production volume in the U.S. will have little effect.
Hyundai GLOVIS expects that the increase in Hyundai and Kia's production in the U.S. will lead to a rise in transportation volume within the U.S. The volume of semi-finished parts that need to be sent from Korea may also increase. Song Seon-jae, a researcher at Hana Financial Investment, noted, "From 2020 to 2024, when the overseas production volume of Hyundai and Kia increases by 18%, Hyundai GLOVIS's sales related to semi-finished parts increased by 75%, and overseas logistics sales increased by 93%."
Hyundai GLOVIS has focused on increasing customers outside of Hyundai and Kia. Chung Eui-sun, chairman of Hyundai Motor Group, has instructed each affiliate to develop independent competitiveness since taking office. Hyundai GLOVIS is responsible for the logistics of foreign automakers such as Germany's Volkswagen and China's BYD. A Hyundai GLOVIS official stated, "In recent years, there has been a continuous shortage of car carriers. We can expand the remaining capacity through non-affiliate sales and are expanding our operations across several countries."
Hyundai Mobis, which supplies auto parts, cannot avoid the tariffs imposed by the Trump administration but intends to increase overseas orders. The company is expected to seek to expand its orders based in the North American market. Hyundai Mobis is supplying head and rear lamps and display modules for Stellantis's main models in North America, while providing central control devices that control audio and climate control systems and parking brakes to General Motors. Since the second half of 2022, the company has also been producing chassis modules for Mercedes-Benz in Alabama.
A Hyundai Mobis official stated, "We are looking for ways to minimize the impact while monitoring the government's future guidelines and standards." Hyundai Mobis has reduced its dependence on the group and achieved a record operating profit exceeding 3 trillion won for the first time last year. In 2023, it secured $9.22 billion (approximately 12.7 trillion won) in orders from overseas finished vehicle manufacturers, the largest record to date.