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Hyundai, Kia exports to U.S. slide nearly 22% as tariffs jolt shipments

Published: 25 Jun. 2025, 17:52 Updated: 25 Jun. 2025, 19:01

Hyundai Motor's labor union in front of the company's Ulsan plant on May 20 [YONHAP]

Hyundai Motor and Kia saw their vehicle exports to the United States drop by 21.5 percent on year in May, following the Trump administration’s implementation of new tariffs on imported cars.

According to industry data released Tuesday, Hyundai and Kia exported a combined total of 77,892 vehicles to the U.S. last month — 42,574 from Hyundai and 35,318 from Kia. That is down from 99,172 vehicles in May last year. Hyundai’s exports declined by 31.4 percent and Kia’s by 4.8 percent.

The Trump administration began imposing a 25 percent tariff on imported automobiles on April 3. In response, Hyundai and Kia froze their vehicle prices in the country until June 2 to prevent a drop in sales — a measure they later extended until July 7.

The companies adopted a strategy of first clearing out inventory that had already cleared U.S. customs before the tariffs took effect, and therefore faced fewer price increases on imports subject to the tariff. As of early April, Hyundai had 94 days’ worth of inventory and Kia 62 days’ worth. This strategy led to a reduction in export volume from Korea, according to analysts.

However, with little progress being made in Korea-U.S. tariff negotiations, concerns are rising that domestic production will also be affected. If the tariffs remain in place, Hyundai and Kia may raise prices in the United States starting July 8. This would hurt their price competitiveness, likely reducing sales, which in turn would hurt exports and ultimately production volume in Korea.

Cars on sale are parked at a the Kia AutoLand Gwangmyeong branch in Gyeonggi on June 24. [YONHAP]

Warning signs are already emerging. According to the Korea Automobile & Mobility Association, Hyundai and Kia produced a total of 291,649 vehicles domestically last month, a 5 percent decrease compared to a year earlier. Korea’s overall vehicle production also fell by 3.7 percent to 358,969 units.

Factory shutdowns are becoming more frequent. Hyundai will suspend operations on Line 2 of Ulsan Plant 1 — where electric vehicles such as the Ioniq 5 and Kona Electric are produced — from June 25 to 27. It will be the fourth such suspension this year, driven by declining sales in both the U.S. and Korean markets.

In an effort to mitigate the impact of the tariffs, Hyundai is ramping up local production of popular models such as the Tucson and seeking to boost sales of less popular models in other countries.

“U.S. automakers such as Ford and General Motors, which manufacture vehicles domestically, are beginning to gain market share,” said Lee Ho-geun, a professor of future automotive studies at Daedeok University. “Hyundai and Kia are left with no option but to endure the pressure — through cost-cutting and waiting — while hoping for a breakthrough in Korea-U.S. tariff negotiations.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM HYO-SEONG [[email protected]]