Hyundai Motor has formed a task force to tackle high U.S. tariffs and is adjusting its production strategies. During a corporate briefing on April 24, Hyundai announced the partial relocation of SUV Tucson production from Mexico to its Alabama plant in the U.S.
The automaker plans to consider shifting production of certain models currently made in Korea and exported to the U.S. to other locations. This proactive move responds to the Trump administration’s threat to impose a 25% tariff on auto parts by Saturday.
Hyundai aims to minimize the impact of tariffs on its financial performance through the task force and plans to increase local parts procurement in the U.S. However, the production shift is relatively limited, with only about 16,000 Tucson units produced in Mexico last year.
Hyundai disclosed its first-quarter results for 2025. Operating profit increased by 2% year-over-year to 2.7 billion USD (3.6 trillion KRW), marking a record high for the first quarter and generally meeting market expectations.
The improved performance was mainly due to the weak won, which contributed about 450.75 million USD (601 billion KRW), offsetting negative factors like increased incentives in the U.S. and Europe and declining SUV sales. Hybrid vehicle sales surged by 40% year-over-year, boosting overall performance.
U.S. dealer shipments increased by only 1% year-over-year, but consumer sales jumped 11% due to pre-purchase demand ahead of potential tariff implementation.
Hyundai maintained its forecast for the year, projecting revenue growth of 34% and an operating profit margin of 7.0 to 8.0%, in line with its January outlook.
The South Korean government plans to engage in trade negotiations with the U.S. However, analyst Kim ChangHo from Korea Investment & Securities cautioned that unless Korea makes significant concessions, an early agreement on auto tariffs seems unlikely. He also added that the automotive sector faces greater tariff risks compared to other industries.
