Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Hyundai Motor Group shifts focus to Europe, Middle East to offset US export drop
Hyundai Motor Group Vice Chair Chang Jae-hoon, second from left, and a group of Korean business leaders pose with French President Emmanuel Macron on the sidelines of this year's Choose France summit in Paris, Monday (local time). Courtesy of the Federation of Korean Industries
By Lee Min-hyung
Kia seeks bigger revenue in Australia, New Zealand
Amid falling exports to the United States due to President Donald Trump's 25 percent auto tariff, Hyundai Motor Group is now looking to Europe and the Middle East to offset their losses, according to data and experts Wednesday.
According to data from the Ministry of Trade, Industry and Energy, Korea’s auto exports to the U.S. plunged by 20 percent in April compared to a year earlier, part of the aftermath of tariff shocks.
However, the decline was partly offset by expanded exports to Europe, Asia and the Middle East during the same period. Shipments to the European Union surged by 26.7 percent, while exports to Asia and the Middle East increased 53.9 percent and 4.5 percent, respectively.
As Hyundai Motor Group’s three auto brands — Hyundai Motor, Kia and Genesis — account for most of Korea’s auto exports, the strategic importance of overseas expansion will continue to grow under the Trump presidency, according to experts.
“Hyundai Motor Group has no choice but to expand its sales channel overseas, as exports to the U.S. — the largest export destination to the firm — are rapidly declining due to the aftershock of the tariff,” said Lee Ho-geun, an automotive engineering professor at Daeduk University.
The company is also making a clear move to expand its footprint in high-growth regions.
Last week, Hyundai Motor Group held a groundbreaking ceremony for its first plant in Saudi Arabia, signaling its strong commitment to achieving sustainable growth in the Middle East.
Hyundai Motor Group Vice Chair Chang Jae-hoon, third from right, poses during the groundbreaking ceremony for Hyundai Motor Manufacturing Middle East at the King Salman Automotive Cluster in Saudi Arabia, May 14 (local time). Courtesy of Hyundai Motor
After attending the event, Hyundai Motor Group Vice Chair Chang Jae-hoon also went to Paris to attend the Choose France summit hosted Tuesday (local time) by French President Emmanuel Macron.
Europe is one of the world’s largest markets for eco-friendly vehicles, and Chang’s visit to the French capital may be a strategic move to strengthen business ties with France and the broader regional economy.
“The importance of Europe cannot be overstated for Hyundai Motor Group, as the carmaker needs to minimize any further decline in exports to the U.S.,” Lee said.
Even though the Middle Eastern market is smaller than Europe's, the carmaker’s long-term vision to turn its Saudi Arabian factory into an export hub for the Middle East and even Africa is a step in the right direction, according to Lee.
Kia is also seeking to expand its sales channels into Oceania with the planned launch of its first-ever pickup truck, the Tasman, in Australia and New Zealand.
The carmaker is scheduled to start selling the vehicle in both countries this summer. Kia CEO Song Ho-sung was also recently spotted visiting retail stores in the region, potentially aiming to diversify the company’s revenue stream with the new strategic model.
Auto industry officials say Hyundai Motor Group’s strategy to expand its global sales channels is a wise move, given the ongoing uncertainty surrounding U.S. tariffs.
“The Korean government is in tariff talks with the U.S., but nothing specific has been confirmed, so the carmakers have to brace for the worst by reducing reliance on the U.S. and expanding sales into other countries,” an official from the industry said.