SEOUL, June 26 (AJP) - Exports of Hyundai Motor and Kia vehicles to the United States plunged 21.5 percent in May compared with the same month a year ago, as the Trump administration’s 25 percent tariff on imported automobiles begins to significantly alter trade flows.
The two South Korean automakers, part of the Hyundai Motor Group, shipped 77,892 vehicles to the U.S. last month, down from 99,172 in May 2024, according to figures released Thursday by the Korea Automobile & Mobility Association.
The steep drop underscores the mounting pressure on automakers operating in export-dependent economies as Washington intensifies its protectionist stance on trade.
“High tariffs will reduce U.S. auto exports and hurt automaker profitability as companies shift to local production while being unable to fully pass increased costs to consumers in a weakened market,” said Kim Kyoung-you, a senior research fellow at the Korea Institute for Industrial Economics & Trade, in a recent report.
The tariffs, first proposed by Trump in April and swiftly enacted, are already driving strategic pivots. Dealers in the United States, anticipating the added costs, prioritized clearing existing inventories ahead of the new levy.
According to Cox Automotive, Hyundai and Kia dealers held roughly 94 days and 62 days of inventory, respectively, as of early April. Those stockpiles are now largely depleted, setting the stage for tighter margins in the second half of the year.
To mitigate the blow, Hyundai Motor Group has accelerated production at its new plant in Georgia, which began operations in March. But analysts warn that expanded U.S. production will not fully offset the losses from declining exports in the near term.
The fallout from the U.S. tariffs is also reverberating through South Korea’s domestic auto sector.
National vehicle production fell 3.7 percent year-over-year in May to 358,969 units. Hyundai’s output declined 6.0 percent, while Kia’s dropped 3.8 percent, data from the Korea Automobile & Manufacturers Association shows.
reporter
Kim Dong-young
davekim0807@ajupress.com
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