S&P Global Ratings said on the 30th that Hyundai Motor Group is expected to gradually ease credit pressures this year as it records a modest recovery in profitability.
S&P said that compared with last year, when profitability plunged due to tariff expenses, this year's results should recover as tariff burdens stabilize and a better product mix, expense cuts, and a weaker won work together.
By S&P's measure, the combined adjusted EBITDA margin of Hyundai Motor and Kia was estimated to have fallen from 12% in 2024 to about 9.2% in 2025. While tariff expenses weighed on results, intensifying price competition and the potential for greater incentives were also cited as variables for profitability.
However, under the updated base-case scenario, the adjusted EBITDA margin of Hyundai Motor and Kia is expected to recover to about 10% in 2026. S&P said the two companies plan to continue expense-saving efforts to offset tariff burdens and to improve their product and regional portfolios by expanding hybrid sales.
S&P cited tariff expenses as the biggest variable for earnings prospects and the main downside risk. It said President Donald Trump's suggestion that he could restore tariffs on Korean imports to 25% on grounds of legislative delays related to Korea's trade agreement shows that uncertainty surrounding tariffs is very high.
In its base-case scenario, S&P estimated this year's tariff expenses at a similar level to last year, between 7 trillion won and 8 trillion won. It added that although the tariff rate was reduced from 25% to 15% starting in November last year, it reflected that tariffs were imposed for only nine months last year, whereas they are imposed for the full year this year. If the tariff rate is raised again, it would mean the pace of profitability recovery could also be delayed.