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 faces inevitable US price hikes amid 25% auto tariffs
Hyundai Motor Group Executive Chair Chung Euisun applauds during a completion ceremony for Hyundai Motor Group Metaplant America in Georgia, March 26. Courtesy of Hyundai Motor Group
By Lee Min-hyung
Hyundai Motor Group may be forced to raise vehicle prices in the United States to offset the impact of Washington’s 25 percent auto tariff, industry officials and analysts said Monday.
Top management from Hyundai Motor and Kia — the two major auto brands under the group — have so far denied any imminent vehicle price increases due to tariff repercussions.
However, experts and industry officials expect both automakers to gradually raise their auto prices in the world’s largest economy, as their tariff-free inventory is rapidly running out, forcing them to import more cars that are subject to the massive tariff introduced April 2.
Hyundai Motor and Kia had three months and two months of inventory for U.S. sales, respectively. This limited stock has raised concerns that both carmakers may be compelled to raise prices after July, as their profitability would rapidly fall due to the tariff-hit auto imports to the country.
Hyundai Motor's Santa Fe family SUV / Courtesy of Hyundai Motor
"The carmakers will constantly review the range of the price rise, but the direction looks inevitable on the tariff burden," said Lee Ho-geun, an automotive engineering professor at Daeduk University.
Hyundai Motor Group remains one of the few major automakers that have not yet raised prices in the U.S. following the April 2 imposition of the 25 percent tariff on imported vehicles. In comparison, other global brands such as Ferrari, BMW, Volvo and Ford have already increased prices to offset the impact of the tariff.
According to data from Kyobo Securities, Hyundai Motor is expected to face a tariff-incurred financial burden of 6 trillion won ($4.4 billion) in 2025. The brokerage house estimated Hyundai Motor’s annual operating profit would drop by 17.5 percent this year from a year earlier.
The cautious outlook is rooted in the carmakers’ growing reliance on the U.S. for sales. Both carmakers’ dependence on the U.S. has gradually increased for the past few years. In 2024, Hyundai Motor’s exports to the U.S. reached 54 percent of total exports, while those from Kia came in at 38 percent.
The Korean trade authority is now in talks with its U.S. counterpart to abolish or reduce the auto tariff, aiming to secure the so-called “July package” deal by July 8.
However, both carmakers cannot count on any best-case scenario as U.S. President Donald Trump intensifies trade pressure. He recently said the U.S. is considering increasing auto tariffs even further in the near future.
“Hyundai Motor Group is seeking a breakthrough by increasing its production in the U.S., but it still requires some time for the carmaker to maximize the production capacity there, so the price hike looks inevitable to ensure their short-term profitability,” an auto industry official said.