Hyundai, Kia shares plunge amid US tariff fears, investor confidence dips

Hyundai Motor Group Executive Chair Chung Euisun delivers a speech during an opening ceremony of Hyundai Motor Group Metaplant America in Georgia, March 26. Courtesy of Hyundai Motor Group

Shares of Hyundai Motor and Kia are rapidly losing momentum as ongoing tariff pressures from the United States continue to fuel investor anxiety both domestically and internationally, according to market analysts and data released Monday.

The two automakers have signaled efforts to navigate the ongoing uncertainty by increasing investment in the U.S., their largest export market. However, these efforts have fallen short of alleviating concerns, as their stock values have continued to plummet in recent weeks amid heightened fears over a 25-percent tariff on all auto imports.

After U.S. President Donald Trump slapped the massive tariff on Thursday, shares of the two Korean carmakers have extended sharper declines.

According to data from the Korea Exchange, Hyundai Motor shares set an all-time high of 299,500 won ($204.5) per share in June last year, but plunged to below 180,000 as of Monday. Shares of Kia also showed a similar trend during the same period, as investors engaged in a mass-selling spree of the carmakers’ shares due to the prevailing tariff uncertainties.

Hyundai Motor and Kia are on track to reassure investors with a confident outlook. Top executives from both automakers recently stated that they have no immediate plans to raise auto prices in the U.S.

Market analysts, however, said carmakers would have no choice but to increase their vehicle prices in the end, which would dampen overall demand from customers there.

“Auto price hikes are inevitable for global carmakers, such as Hyundai Motor and Kia, due to the imposition of the tariff,” Lee Jae-il, an analyst at Eugene Investment & Securities, said. “Under the scenario, demand for cars will steeply shrink.”

According to a projection by Daol Investment & Securities, Hyundai Motor's annual operating profit is forecast to fall by 2 trillion won this year from a year earlier due to the aftershocks of the tariffs.

Industry officials argue that Hyundai Motor and Kia will remain exposed to trade risks from the U.S. at least until Korea elects its next head of state, likely on June 3, following the Constitutional Court’s removal of former President Yoon Suk Yeol on Friday over his declaration of martial law last year.

“The absence of direct communication with Trump has left local conglomerates exposed to bigger trade risks from the U.S. over the past few months,” an official from a conglomerate said. “The prolonged political chaos has also affected the stock market, speeding up the exodus of foreign capital.”

Hit by the tariff-induced investor anxiety, shares of Hyundai Motor extended their losing streak on Monday, falling 6.62 percent to 179,100 won on the benchmark KOSPI from the previous trading day. Kia shares also failed to defend the widening external uncertainty, plunging 5.69 percent to 84,600 won.