Hyundai Motor launches tariff task force, shifts some Mexico output to the US

Written by Hyungo Jin, Joyce Lee and Haikong Yang

Seoul (Reuters) -Hyundai Motor said on Thursday that it launched a work squad to respond to the American definitions, adding that the production of some Toxon’s transitions has now been transferred from Mexico to the United States.

He also considers whether the production of some cars associated with the United States from South Korea to other sites, as the auto industry said at a rise of 2 % in operating profits in the first quarter and reaffirmed its annual profits.

Hyundai and Affiliate Kia, which together is the third largest automatic group in the world, according to sales, is especially vulnerable to American definitions.

They are born about a third of their global sales from the United States market and acquire nearly two -thirds of US car sales, according to data from Korea for investment and securities.

“We expect difficult businesses to continue due to the intensification of commercial conflicts and other unexpected macroeconomic factors,” Hyundai said in a statement.

The Labor Squad, which was launched this month, will seek to reduce the impact of American definitions on its financial resources and will formulate plans to increase local resources for car components in the United States.

The administration of US president Donald Trump has slapped a 25 % tariff on cars since April 2 and plans to impose a 25 % tariff on auto parts no later than May 3, aiming to raise vehicle prices and reduce car sales.

Later on Thursday, South Korea and the United States agreed to formulate a commercial package aimed at removing the new American tariff before stopping the mutual tariff in July.

Finance Minister Choi Sang Mok said that Seoul had requested some exemptions from the definitions and highlighted the auto sector, which is especially weak.

The Hyundai Labor Squad is at the top of a $ 21 billion investment plan for the United States, which was announced by the broader Hyundai Group with Trump at the White House last month. As part of this plan, Hyundai has pledged to increase production in its new factory in Georgia, but any increase in American production will take time and the customs tariff may cost billions of dollars.

The transformation of some of the production of Toxon to its factory in Alabama, although it is important, but it is relatively small, as it was made about 16,000 in Mexico last year.

Other measures that took the front loading of some vehicle shipments to the United States, which led to 3.1 months of stock in North America.

Hyundai plans to maintain stickers’ prices on the current style assortment until June 2 and manage prices flexible after that.

Coin

It benefited from the weakest South Korea winning and an increase of 40 % in hybrid vehicle sales, Hyundai booked a operating profit of 3.6 trillion Won ($ 2.5 billion) for January to March, in line with estimates and record for the first quarter.