Hyundai Motor Group under pressure to rebalance portfolio amid renewed tariff risks

A pedestrian walks past a Hyundai Motor store in Seoul, Thursday. Yonhap

Hyundai Motor Group is facing mounting pressure to market its higher-margin premium models more broadly and lower its reliance on the United States, as the carmaker tries to sustain growth amid renewed tariff risks, experts said Sunday.

Market watchers said the group is unlikely to achieve a meaningful earnings rebound this year without changing its approach, noting that U.S. auto tariffs resulted in trillions of won in losses for its Hyundai and Kia brands last year.

The tariff risk appeared to ease in November last year after the U.S. lowered an auto tariff on imports from Korea to 15 percent from 25 percent, following a new trade agreement between the two countries.

However, with the Donald Trump administration recently threatening to reinstate the higher tariff on Korean vehicles, Hyundai Motor Group is once again exposed to external trade risks.

Experts said the carmaker has to maximize sales of highly profitable models, such as luxury SUVs and vehicles with hybrid powertrains, to offset the firm’s potential earnings decline.

“The carmaker needs to increase sales of profitable models, as the strategy is effective in cushioning for short-term exposure to external risks,” said Lee Ho-geun, an automotive engineering professor at Daeduk University.

Kia's Telluride family SUV / Courtesy of Kia

The most profitable lineups include Hyundai Motor’s Palisade large SUV and Kia’s Telluride three-row SUV, as well as premium Genesis models, such as the GV80, GV70 and G80.

The professor also urged the carmaker to diversify its sales channels to offset the U.S. tariff issue.

“Hyundai Motor Group is a carmaker heavily reliant on exports, particularly to the U.S. and Europe, but the company’s earnings are highly vulnerable to policy risks from the two regions,” Lee said.

He said the carmaker needs to step up efforts to expand sales in other, less saturated markets, such as Latin America, India and the Middle East.

“From a long-term perspective, along with the export channel diversification, the carmaker also has to focus on taking the initiative in its key future growth engines, such as hydrogen cars and humanoid robots,” the professor said.

Hyundai Motor Group Executive Chair Chung Euisun, second from left, delivers remarks as President Donald Trump looks on at the White House in Washington, March 24, 2025. AP-Yonhap

Other experts painted a gloomy picture of the carmaker's prospects under the Trump administration.

“Even if Korea succeeds in cutting the tariff to the previous level in the ongoing tariff negotiations with the U.S., we cannot rule out the possibility that the Trump administration could suddenly hike them again during his presidency,” said Kim Pil-soo, an automotive technology professor at Daelim University College.

He suggested that the carmaker should engage in a long-term strategy to gradually reduce its reliance on the U.S.

“The problem is that the tariff and other similar trade risks cannot be alleviated easily even after the Trump presidency, so the carmaker has to prepare for the worst-case scenario,” Kim said.

The carmaker needs to relocate its factories and make concerted efforts to create opportunities in new markets in the long term, in order to avoid being overly reliant on the U.S., according to the professor.

“The carmaker is faced with fierce competition from Chinese rivals in markets outside the U.S., but it has to keep up efforts to expand its footing elsewhere to avoid the risks in the long run,” Kim said.

According to data from the Korea Automobile and Mobility Association (KAMA), the combined market share of Hyundai Motor and Kia in the U.S. increased 0.5 percentage points from a year earlier to 11.3 percent in 2025, the largest figure in the carmakers’ history there.

The U.S. also accounted for 25.9 percent of Hyundai Motor Group’s global sales last year, up 0.4 percentage points from a year earlier.

However, the two brands’ collective share of the European market fell 0.3 percentage points to 7.9 percent during the same period, due in part to intense competition in electric vehicles from Chinese companies.