Hyundai Motor launched a special task force on Thursday to deal with tariffs imposed by US President Donald Trump with an aim to minimise the impact on the financial health of the company. It is mulling to move production of some US-bound cars from South Korea to other locations and increase local sourcing of car components in the US. The South Korean automaker mentioned that manufacturing of some Tucson crossovers has now been shifted from Mexico to the US to avoid tariff heat, Reuters reported.
The company’s efforts to protect its business from tariff consequences comes at a time when South Korea is set to hold trade talks with the US.
How Hyundai Is Navigating the Tariff Storm
President Trump has imposed 25% tariffs on automobiles and has planned to impose 25% tariffs on auto parts by May 3, which makes the South Korean auto giant more vulnerable, mainly because the US market comprises nearly one-third of their global sales.
“We expect a challenging business outlook to continue due to intensifying trade wars and other various unpredictable macroeconomic factors,” the South Korean auto giant said in a statement, according to Reuters.
The setting up of a task force comes just a month after Hyundai Motor Group announced a $21 billion investment plan for the US at the White House, including setting up a new factory in Georgia. Apart from this, the car maker has planned to retain ticker prices on its current model lineup until June 2, and it is also frontloading some vehicle shipments to the US.
The company is also reportedly holding talks with General Motors to forge a partnership, but no official announcement has been made yet. The collaboration is likely to be to produce commercial vans and pickup trucks in North America.
