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Korea Herald
03-07-2025
- Automotive
- Korea Herald
Hyundai, Kia brace for tariff impact in US
Experts, industry officials expect inevitable price hikes unless Seoul cuts tariff deal with Washington Despite their recording-setting first-half performance in the US market, Hyundai Motor and Kia are buckling up for the impact of new tariffs as President Donald Trump recently confirmed that the 25 percent levies on auto imports to the US will take effect next week. Hyundai and Kia reported on Wednesday that they sold a record-high 893,152 cars in the US in the first half of this year, up 9.2 percent from the same period last year, with hybrid vehicles leading the growth. Both companies have so far resisted raising prices in response to the looming tariffs, denying speculation they might hike sticker prices to offset costs. In contrast, rivals including Toyota and Ford have reportedly begun increasing prices to cope with the expected duties. Hyundai and Kia's US plants are already running at full capacity. According to the companies' business reports in the first quarter of this year, Hyundai's Alabama plant and Kia's Georgia plant logged operation rates of 102.8 percent and 99.8 percent, rolling out 90,600 and 89,800 cars, respectively. Hyundai could turn to its newly opened Hyundai Motor Group Metaplant America in Georgia to ramp up local production to avoid the tariffs, having decided to speed up plans to expand its annual production capacity to 500,000 units from the previous figure of 300,000 units. But that is unlikely to solve the imminent problem of tariffs as the automaker said it will begin producing hybrid vehicles at HMGMA, which was initially designed exclusively for electric vehicles, next year. While the automakers are expected to unveil measures in response to the US tariffs in their second-quarter earnings announcements later this month, experts and industry officials are calling for a package deal from the Korean government to minimize potential damage to the country's auto industry, which plays a crucial role in its overall exports. 'There are things that the US could ask for (from Korea) such as shipbuilding,' said Kim Pil-su, an automotive engineering professor at Daelim University. 'We need to make a big deal ... If we get the tariffs down to the 10 percent range or a single-digit (percentage), I think that would be a great success.' An auto industry official noted that if the preannounced 25 percent tariffs on auto exports to the US go into effect, Hyundai and Kia might have no choice but to raise prices. 'Other automakers are almost being forced to hike their prices,' said the official. '(Hyundai and Kia) have been selling well in the first half of this year, but they will need to make tough but necessary decisions to keep expanding their market presence in the US.' Market analysts have lowered their expectations for Hyundai and Kia for the rest of the year amid the looming tariff risks. Meritz Securities forecast that if the US maintains the 25 percent duty on auto imports from the Korean automakers, Hyundai Motor's annual operating profit would be cut by 6.26 trillion won ($4.62 billion) this year, which equals about 44 percent of the company's annual operating profit last year. Hanwha Investment & Securities estimated that Kia will have to bear approximately 2.3 trillion won in costs due to the tariffs this year, adding that a 3.7 trillion won cut in profit is expected throughout next year, should the tariffs stay in place. According to market analysis FnGuide, the projected operating profits of Hyundai Motor and Kia for this year were reduced by 1.8 trillion won and 1.4 trillion won, respectively.
Korea Herald
20-05-2025
- Automotive
- Korea Herald
Hyundai to halt Ioniq 5, Kona EV production again amid weak demand
Hyundai Motor is set to temporarily halt production of electric vehicle models the Ioniq 5 and Kona EV at its Ulsan plant, marking its third production suspension this year amid sluggish global EV demand. According to industry sources on Tuesday, Hyundai Motor plans to suspend operations on the second production line at Plant 1 in Ulsan, where both the Ioniq 5 and Kona EV are manufactured for domestic and overseas markets. 'Internal notification about the suspension has been distributed within the Ulsan plant, including to the labor union, and the company is currently awaiting the union's approval,' an industry insider said on condition of anonymity. Once finalized, the suspension will take place from May 27 to 30, following earlier five-day shutdowns in February and April. In its internal notice, Hyundai cited the 'prolonged slump in global EV sales' as the main reason for the suspension. The company acknowledged challenges in boosting Ioniq 5 sales despite offering a 6 million won ($4,300) discount, roughly 15 percent of the vehicle's price, along with various other promotional efforts. Thanks to those efforts, domestic sales of the Ioniq 5 and Kona EV between January and April rose 11.4 percent and 92.6 percent year-on-year, reaching 4,125 and 1,198 vehicles sold, respectively. However, these gains were overshadowed by sharp declines in exports. Ioniq 5 exports from the Ulsan plant during the same period plunged 64 percent year-on-year, from 27,476 to 9,663 vehicles. Exports of the Kona EV also dropped 42.1 percent to 3,428 vehicles. To manage the growing inventory, Hyundai has adjusted its production pace on the line, which is capable of producing up to 27.5 EVs per hour. The company has been leaving 1 out of every 3 positions on the conveyor belt vacant and has not assigned any weekend shifts to the line since March. Kim Pil-su, a professor of automotive engineering at Daelim University, however, called the production halts a temporary adjustment in Hyundai's EV strategy rather than a long-term retreat. 'While global competition has intensified, particularly with the expansion of Chinese EV brands, the broader adoption of electric vehicles is taking longer than expected,' Kim said. 'But the shift to EVs is inevitable. This current slowdown in pace is unlikely to become permanent.' forestjs@
Korea Herald
20-05-2025
- Automotive
- Korea Herald
Hyundai to halt Ioniq 5, Kona EV production again amid weak demand
Hyundai Motor is set to temporarily halt production of electric vehicle models the Ioniq 5 and Kona EV at its Ulsan plant, marking its third production suspension this year amid sluggish global EV demand. According to industry sources on Tuesday, Hyundai Motor plans to suspend operations on the second production line at Plant 1 in Ulsan, where both the Ioniq 5 and Kona EV are manufactured for domestic and overseas markets. 'Internal notification about the suspension has been distributed within the Ulsan plant, including to the labor union, and the company is currently awaiting the union's approval,' an industry insider said on condition of anonymity. Once finalized, the suspension will take place from May 27 to 30, following earlier five-day shutdowns in February and April. In its internal notice, Hyundai cited the 'prolonged slump in global EV sales' as the main reason for the suspension. The company acknowledged challenges in boosting Ioniq 5 sales despite offering a 6 million won ($4,300) discount, roughly 15 percent of the vehicle's price, along with various other promotional efforts. Thanks to those efforts, domestic sales of the Ioniq 5 and Kona EV between January and April rose 11.4 percent and 92.6 percent year-on-year, reaching 4,125 and 1,198 vehicles sold, respectively. However, these gains were overshadowed by sharp declines in exports. Ioniq 5 exports from the Ulsan plant during the same period plunged 64 percent year-on-year, from 27,476 to 9,663 vehicles. Exports of the Kona EV also dropped 42.1 percent to 3,428 vehicles. To manage the growing inventory, Hyundai has adjusted its production pace on the line, which is capable of producing up to 27.5 EVs per hour. The company has been leaving 1 out of every 3 positions on the conveyor belt vacant and has not assigned any weekend shifts to the line since March. Kim Pil-su, a professor of automotive engineering at Daelim University, however, called the production halts a temporary adjustment in Hyundai's EV strategy rather than a long-term retreat. 'While global competition has intensified, particularly with the expansion of Chinese EV brands, the broader adoption of electric vehicles is taking longer than expected,' Kim said. 'But the shift to EVs is inevitable. This current slowdown in pace is unlikely to become permanent.'
Korea Herald
12-05-2025
- Automotive
- Korea Herald
Hyundai Mobis bets on robotics as Atlas mass production looms
Hyundai Mobis, the automotive parts manufacturing arm of Hyundai Motor Group, is poised to develop robotics joints for Atlas, the flagship humanoid robot produced by Boston Dynamics, the automaker's robotics subsidiary. According to media reports on Monday, Hyundai Mobis recently shared its plans with its institutional investors to consider supplying 'actuators,' the mechanical systems that convert electrical energy into motion, for Atlas. These components will allow the robot to replicate the movement of human joints and muscles, enabling it to perform precision tasks such as assembling car parts. The company is expected to supply actuators by 2028, which is in line with Hyundai Motor Group's plan to mass produce Atlas by 2028. By the end of this year, the carmaker looks to deploy the humanoid in its key global production sites, including the Hyundai Motor Group Innovation Center in Singapore and Hyundai Motor Group Metaplant America. 'Robotics is one of the strategies of applying our core electrification technologies to future businesses,' said a Hyundai Mobis official, who declined to disclose specifics, citing confidentiality. Hyundai Mobis is reportedly developing approximately 30 types of actuators, which account for more than half of the production cost of humanoid robots. These actuators will likely consist of 3-in-1 systems with motors that convert electrical energy into torque, precision-control reducers and controllers that adjust the robot's movements. Industry insiders indicate that Hyundai Mobis' foray into robotics signals Hyundai Motor's revamped commitment to advance its humanoid initiative. The carmaker is looking to list Boston Dynamics on the New York Stock Exchange, which requires demonstrating a technological edge over its competitors. According to Morgan Stanley, there are currently more than 100 publicly listed companies worldwide that develop humanoid robots, with more than half of these being Chinese firms. Earlier this year, Hyundai Motor vowed to accelerate its robotics business by forging a strategic partnership with Nvidia, the US chip giant, to create artificial intelligence-based robots as well as virtual environments for training robots. 'In the long term, the introduction of Atlas could offer a solution to mitigate the rising labor costs resulting from the expansion of Hyundai Motor's overseas production centers, including those in the US,' said Kim Pil-su, a car engineering professor at Daelim University. In 2021, Hyundai Motor Group acquired an 80 percent stake in Boston Dynamics for approximately 1 trillion won ($ 712.5 million). While its sales revenue rose from 78.2 billion won in 2022 to 91 billion won in 2023, its net loss also expanded from 255.1 billion won to 334.8 billion won in the same period. Due to its declining profitability, its US market debut has been repeatedly postponed, sources said. To secure funding, the carmaker has undertaken four rounds of capital increases since 2022. Meanwhile, the global humanoid industry is anticipated to experience significant growth, primarily driven by the burgeoning AI market. According to MarketsandMarkets, an India-based market tracker, it is projected to expand to $13.3 billion by 2029 from last year's $2 billion.
Korea Herald
27-04-2025
- Automotive
- Korea Herald
Hybrids drive Hyundai, Kia SUV sales
Four out of ten Hyundai Motor Company and Kia sport utility vehicle buyers opted for hybrid models in the first quarter of this year in the South Korean market, highlighting the penetration of dual-power vehicles amid a slowdown in electric vehicle demand. According to industry sources Sunday, Hyundai Motor and Kia sold 150,492 SUVs, of which 59,386 units were hybrids, accounting for 39.5 percent. Last year, the domestic sales of Hyundai and Kia hybrid SUVs nearly doubled from 117,499 units in 2022 to 244,776 units, with the hybrid purchase ratio reaching 40.8 percent. Notably, Hyundai, which historically had a lower volume of SUV sales than Kia, has witnessed a dramatic surge in hybrid SUV sales, rising 3.5 times from 26,250 units in 2022 to 92,290 units in 2024. This growth has led to a consistent increase in the share of hybrid SUV models from 12.3 percent to 37.6 percent in the same period. Hyundai's Santa Fe Hybrid stands out as the best-selling vehicle powered by an internal combustion engine and an electric motor, with its hybrid purchase ratio increasing from 47 percent in 2022 to 77 percent in the first quarter. In addition, for the All-New Palisade, launched in January this year, it has been reported that 67 percent of the preorder customers have chosen the hybrid model. In the case of Kia, its Sorento Hybrid topped domestic SUV sales from January to March with 26,676 units. The Carnival and Sportage Hybrid SUVs secured the No. 2 and No. 3 positions, respectively, demonstrating the strong competitive edge of Kia's recreational vehicle lineup within the brand. Industry watchers anticipate that hybrid vehicles could surpass 50 percent of total local SUV sales this year for Hyundai and Kia, potentially offsetting the impact of automobile tariffs imposed by the US. 'Hybrid vehicles are approximately 20 percent more expensive than the internal combustion engine variants and boast higher profit margins,' said Kim Pil-su, a car engineering professor at Daelim University. 'Hyundai, along with Kia, has incorporated hybrid engines across nearly all of its car lineup, appealing to customers who prioritize fuel efficiency and seek a practical alternative to electric vehicles.' During the automaker's recent conference call, Lee Seung-jo, head of the finance and planning division of Hyundai Motor Group, stressed that Hyundai achieved record-breaking sales revenue and operating profit for the first quarter, which was primarily driven by the highest-ever sales of hybrid vehicles. From January to March, the sales volume of Hyundai Motor and Kia's eco-friendly cars worldwide climbed 38.4 percent and 10.7 percent, respectively, to 212,426 and 174,000 units from the previous year. Hybrids accounted for 64.5 percent of Hyundai's and 59.8 percent of Kia's eco-friendly vehicle sales.
