During the election campaign, when Donald Trump declared that tariffs were “the most beautiful word in the dictionary,” he promised to impose a 25% tax on all imports from Mexico and Canada, as well as an additional 10% on products from China. as soon as he took office.
This set off alarm bells throughout the auto industry, as tariffs could dramatically impact automakers' bottom lines and substantially increase consumer prices.
But even as Trump's January 20 inauguration date quickly approaches, Hyundai Motors appears determined to remain calm.
At the company's annual New Year's speech on January 6, 2025, Hyundai Motor Group Chief Executive Euisun Chung calm assistants that “there is no need to be intimidated by the uncertainties ahead,” because “without challenges, we risk becoming complacent, which presents a greater danger.”
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Embracing change could even help the company innovate, Chung said, because “challenges can raise awareness and drive action.” He added that Hyundai Motor Group has successfully overcome challenges in the past and emerged stronger before, and reiterated that “we will do the same again.”
How would Trump's tariffs affect Hyundai Motors?
Headquartered in Seoul, South Korea, Hyundai Motors is the world's third largest automobile manufacturer in terms of production, behind ToyotTM and Volkswagen. It operates the Hyundai, Kia and Genesis brands.
Only about 5% of Hyundai's sales are tied to Mexico, where it produces models such as the Tucson SUV and the Kia K4 sedan. Compared to other automakers, Hyundai doesn't have much exposure to the country. Ford (F) For example, it counts 9% of its total sales as exports from Mexico, while GM (G.M.) Mexico's exports represent 12% of its sales.
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Analysts at S&P Global They estimate that a tariff between Canada and Mexico would affect Hyundai's profits by less than 2%.
However, if Trump enacts a broader “universal” tariff plan, which would impose a flat 20% tax on all vehicles, the Korean automaker would be hit much harder. According to S&P Global, the company could see up to 19% of its 2025 EBITDA disappear.
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What are some of Hyundai's recent innovations?
Hyundai has been on a roll lately, posting its best sales totals for the month of December and setting annual sales records for the fourth consecutive year.
The company reported sales of 836,802 units in 2024, an increase of 4% from 2023. The Elantra N, Santa Fe HEV, Tucson HEV and IONIQ 5 set record sales in the fourth quarter; In fact, Hyundai's EV retail sales grew enormously. 64% year over year.
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Hyundai has a stated goal of becoming one of the world's leading electric vehicle manufacturers by 2030. It is considered a standard-bearer for the electric vehicle trend, first with hybrids and then with electric vehicle powertrains. With the launch of the Santa Fe, Tucson and Elantra hybrid models in 2021, sales volume skyrocketed.
The Ioniq 5, EV6 and Ioniq 6 have taken home numerous awards over the past two years; The Kia EV9 was even named “World Car of the Year 2024” by an international jury of automotive journalists.
Along with its one-two punch of great fuel economy at a low cost, Hyundai has also been innovating at the top, recently promoting its president of Hyundai North America, José Muñoz, to CEO. The election of a non-Asian CEO was a power move designed to help the company navigate global uncertainties, but it was also “a clear expression of (the company's) commitment to innovation,” according to Chung.
Hyundai's story of embracing change
Hyundai Engineering and Construction Company was founded in 1947 by Chung Ju-yung in Seoul, South Korea. It was a family-owned conglomerate from which Hyundai Motor Company emerged in 1967. At first, Hyundai collaborated with Ford to make the Cortina, Ford's family sedan. In 1975, Hyundai began manufacturing its own models, launching the Pony, a front-engine, rear-wheel drive vehicle with a whopping 70 horsepower.
Its affordability made it instantly popular everywhere it was sold, including Chile, Argentina, Colombia, Ecuador and Egypt, but it took until 1986 for Hyundai vehicles to pass emissions standards and be sold in the US.
Priced at $4,995, the Excel sold 700,000 units in its first seven months, considered the strongest launch ever by an imported automaker. In 1987, the Excel was the best-selling imported compact car in the US.
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But Hyundai's initial insistence on value came at a cost: reliability. Critics called his vehicles “clumsy” and “opaque”; Problems arose with stalled and defective engine parts that could even cause fires. Sales declined and the name “Hyundai” jokingly became an acronym for “I hope you understand that nothing is driveable and economical.”
In the early 2000s, Hyundai took a cue from Japanese automakers to improve its designs, investing heavily in better quality, safety, and manufacturing practices.
To show it was serious and regain consumer trust, it offered buyers incentives like “The Hyundai Advantage,” a 10-year, 100,000-mile powertrain warranty that was one of the strongest auto warranties to date.
As a result of the Asian financial crisis, Hyundai acquired Kia Motors in 1998. It also expanded its production footprint by building a $1.7 billion manufacturing plant in Montgomery, Alabama.
In 2004, Hyundai tied with Honda for initial brand quality in surveys conducted by JD Power, and its sales returned to normal.
Attracting top talent from European automakers, Hyundai took its designs to the next level with models like the Veloster and its fleet of SUVs, and launched the high-end Genesis line in 2003.
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Hyundai's innovation didn't stop there. In fact, you might think some of their products come straight from a science fiction movie.
Hyundai pioneered the Electric Global Modular Platform (E-GMP), which has a flexible chassis that can adapt to a variety of vehicle shapes. It has also invested in advanced manufacturing systems, including robotics, and has tested hydrogen-powered vehicles, autonomous driving systems and even flying taxis.
It was also the first automobile manufacturer to collaborate with <a target="_blank" href="https://www.amazon.com/stores/page/ED0A59DF-111C-4506-8D5E-946F1F00ADF9?inventory=0&distance=75&tag=thestreet-deals-20″>amazon sell their vehicles on the platform, all of which are reasons why CEO Muñoz considers Hyundai a “technology company” and not just a car company.
Even the Pony lit up. In May 2023, almost 50 years after it was first unveiled, Hyundai reintroduced the Pony Concept at the Turin Motor Show in Lake Como, Italy. The car had the same minimalist style, with many technological improvements, which made it, in some ways, much more beautiful.
Who owns Hyundai?
Hyundai's owner, a parent company called Hyundai Motor Group, also owns automakers Genesis and Kia.
Hyundai Motor Group is a publicly traded company, meaning individual investors can buy shares in it, but its shares trade on over-the-counter markets rather than on the New York Stock Exchange or Nasdaq, meaning it does not It is available on the most common trading platforms like Robinhood and usually needs to be bought or sold with the help of an OTC broker.
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How to pronounce hyundai
The answer is “hyun·day” (rhymes with Sunday). Even Hyundai itself poked fun at consumers' perpetual mispronunciation of its name in a recent car commercial.
Well, now we know.
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