Hyundai said today it has launched a task force to respond to US tariffs and reaffirmed its annual earnings target after reporting a 2% rise in first-quarter operating profit.
Hyundai and affiliate Kia, which together are the world’s third-biggest automaking group by sales, are particularly vulnerable to US tariffs.
They generate about one-third of their global sales from the US market and imports account for roughly two-thirds of their US car sales, according to data from Korea Investment & Securities.
“We expect a challenging business outlook to continue due to intensifying trade wars and other various unpredictable macroeconomic factors,” Hyundai said in a statement.
The car maker said it launched a task force this month to minimise the tariff impact on its finances and to craft plans to increase local sourcing of car components in the US.
Benefiting from a weaker South Korean won, Hyundai booked an operating profit of 3.6 trillion won ($2.5 billion) for January to March, in line with estimates.
The weaker won contributed 601 billion won to its operating profit, offsetting the negative impact of increased sales incentives in the US and Europe and lower sales of higher-margin sport utility vehicles.
Hyundai intends to boost production at its new Georgia factory, part of a $21 billion investment plan announced last month with US President Donald Trump at the White House.
But any ramp-up in US production will take time and tariffs could cost the group billions of dollars.
Its US vehicle sales to dealerships rose 1% in the first quarter, but retail sales jumped 11%, as consumers rushed to buy vehicles ahead of 25% car tariffs, which took effect on April 2.
Trump also plans to impose tariffs of 25% on auto parts no later than May 3, which threaten to hike vehicle prices and cut car sales.
Hyundai has said it plans to keep sticker prices on its current model lineup steady till June 2 and will manage prices flexibly afterwards.
It kept its annual guidance provided in January of revenue growth of 3-4% and an operating profit margin of 7-8%.
