The South Korean automakers’ competitors are projected to endure more damage from the tariffs, say auto industry analysts and experts. — Bloomberg
SEOUL: Hyundai Motor Co and Kia may end up benefiting from the US government’s 25% tariffs imposition on Canada and Mexico as the South Korean automakers’ competitors are projected to endure more damage from the tariffs, say auto industry analysts and experts.
S&P Global Mobility reported on Wednesday that the United States imported some 3.6 million light vehicles from Canada and Mexico last year, which accounted for about 22% of all cars sold there last year, pointing out that Mexico is the biggest source of US light-vehicle imports.
“Volkswagen is the most exposed to tariff risk, with over 43% of its US sales sourced from Mexico,” said the report.
According to S&P Global Mobility, last year, Nissan sourced about 27% of its US sales from Mexico.
This was followed by Stellantis at 23%, General Motors at 22%, Ford at just under 15% and Honda at nearly 13%.
Toyota and Hyundai sourced approximately 8% of their US sales from Mexico.
Kia operates a manufacturing plant in Monterrey, Mexico, which is capable of rolling out around 400,000 units per year.
That plant exported about 150,000 cars to the United States last year, while the company produced some 250,000 vehicles with the United States.
Hyundai Motor does not have a plant in Mexico.
“Hyundai Motor has the lowest tariff risk among the traditional automakers,” said Moon Yong-kwon, an analyst at Shinyoung Securities.
“If the selling prices of Hyundai and Kia’s competing models from rival brands in the United States increase due to the tariffs, Hyundai and Kia could benefit from that.”
Yoo Ji-woong, an analyst at Daol Securities, also noted that the South Korean automakers have the lowest proportion of their production capacity located in Canada and Mexico among global auto brands.
Hyundai Motor Group sold record-setting 1.7 million vehicles in the United States last year, up 3.4% from 2023, to retain the title of the fourth-largest auto selling group in America behind GM, Toyota and Ford.
Although the auto conglomerate’s South Korean-made vehicles currently take up about 67% of its US sales, Hyundai and Kia can bolster their US manufacturing capacity with the addition of Hyundai Motor Group Metaplant America, a newly built site in Georgia and the conglomerate’s third manufacturing foothold in the United States, in case of a tariff blow to South Korea. — The Korea Herald/ANN
