Synopsis
Hyundai Motor Group is likely to benefit from U.S. tariffs on Mexico, as it has the lowest production reliance there among major automakers. With competitors facing rising prices, Hyundai could capture a larger market share.Key Takeaways
- Hyundai Motor Group faces minimal impact from U.S. tariffs.
- Competitors like GM and Ford may see price increases.
- Opportunity for Hyundai to grow U.S. market share.
- Lowest production dependence on Mexico among global automakers.
- Over 200 South Korean firms operate in Mexico and Canada.
Seoul, Feb 5 (NationPress) Hyundai Motor Group is anticipated to be among the least impacted global automotive manufacturers from the U.S. government's proposal to impose a 25 percent tariff on imports from Mexico, as per market analysts on Wednesday.
Noteworthy automakers with manufacturing operations in Mexico include General Motors (GM), Ford, Toyota, Nissan, Volkswagen, Honda, and Stellantis, all of which have substantial export volumes to the U.S., according to industry statistics.
In the previous year, GM spearheaded Mexican exports to the U.S. with 712,000 vehicles, followed by Ford and Nissan at 358,000 and 315,000 units respectively, as reported by Yonhap news agency.
Volkswagen ranked fourth with 287,000 units sent to the U.S. from Mexico, with Toyota and Honda following at 228,000 and 211,000 units respectively.
The Hyundai Motor Group has a relatively low dependence on Mexican manufacturing, with its Kia plant in Nuevo Leon exporting 151,000 vehicles to the U.S. in 2024.
Market analysts suggest that the U.S. tariffs on Mexico could elevate competitors' prices, creating an opportunity for Hyundai Motor Group to expand its market share in the U.S.
“Of the 17 million vehicles sold each year in the U.S., 2.8 million originate from Mexico, representing 16.5 percent of imports,” stated Yoo Ji-woong, an analyst at Daol Investment & Securities.
Yoo highlighted that Hyundai Motor Group has the lowest production reliance on Mexico among global automakers, which could provide them with a competitive edge. This sentiment was echoed by Shinyoung Securities in a recent report.
“Hyundai Motor Group faces the minimal risk related to tariffs compared to traditional automakers. If competitors’ vehicle prices increase due to tariffs, the group could seize part of the market through pricing advantages,” it stated.
South Korean conglomerates operate over 200 business entities in Mexico and Canada that may encounter significant tariffs imposed by the U.S. government, potentially starting next month.
A survey conducted by Korea CXO Institute among 88 Korean conglomerates revealed that 25 of them managed a total of 201 subsidiaries in these two nations by the end of 2024.
