Hyundai launches tariffs task force, shifts production of popular SUV to US to avoid hefty import taxes

Hyundai Motor connected Thursday revealed it has created a task unit to contend pinch President Trump’s tariffs and shifted accumulation of 1 its astir celebrated models to nan US to debar hefty import taxes.

The South Korean automaker said manufacturing of immoderate of its Tucsons will beryllium moved from Mexico to its Alabama factory, and is weighing whether to displacement immoderate accumulation of immoderate US-bound cars from Seoul to different locations.

Despite facing 25% tariff successful car imports, nan institution reaffirmed its net forecasts Thursday and reported 2% maturation successful first-quarter operating profit. 

“We expect a challenging business outlook to proceed owed to intensifying waste and acquisition wars and different various unpredictable macroeconomic factors,” Hyundai, which relies heavy connected its US sales, said successful a statement.

Its US income to dealerships roseate 1%, while its unit income jumped 11% arsenic shoppers flocked to showrooms to bargain cars up of nan levy connected car imports, which kicked successful April 3. A 25% tariff connected car parts is slated to return effect connected May 3.

Hyundai’s tariff task force, launched past month, will activity to minimize nan effect of nan taxes by moving connected ways to ramp up section sourcing of car parts, launched past month, successful nan US.

Hyundai and connection Kia, which together are nan world’s third-biggest automaking group by sales, are peculiarly susceptible to U.S tariffs.

They make astir one-third of their world income from nan US marketplace and imports relationship for astir two-thirds of their US car sales, according to information from Korea Investment & Securities.

Last month, Hyundai pledged a whopping $21 cardinal investment into boosting accumulation astatine its caller Georgia mill – announcing nan scheme astatine nan White House pinch Trump conscionable days earlier he projected nan car tariffs.

But accumulation moves cannot beryllium made overnight, and successful nan meantime, nan tariffs could costs nan institution billions of dollars.

Like galore different companies, Hyundai besides rushed to import shipments to nan US, stockpiling 3.1 months worthy of inventory up of nan tariffs.

Analysts person cautioned that nan tariffs could nonstop accumulation costs soaring, since astir awesome automakers thin connected analyzable proviso chains that weave done aggregate nations. Those car firms will apt beryllium tempted to pass astatine slightest immoderate of nan added costs on to consumers.

The automaker said it plans to support prices connected its existent exemplary lineup unchanged until astatine slightest June 2, and past prices will go flexible.

A delegation from South Korea, which is simply a awesome car exporter, is expected to meet pinch US counterparts successful Washington connected Thursday for an opening information of waste and acquisition talks.

With Post wires