By Hyunjoo Jin
SEOUL (Reuters) – South Korean automaker Hyundai Motor (OTC:) said on Thursday it was in talks with General Motors (NYSE:) to supply commercial electric vehicles to its U.S. counterpart, as it expects that sales growth is halving this year due to slowing demand. .
He also flagged political risk in the United States with U.S. President Donald Trump coming to power with promises of tariffs on imports, while saying any negative impact would be greater for Japanese rivals.
The automaker, which signed a preliminary tie-up deal with GM last year, also said it intends to sign binding contracts for cooperation in parts supply and passenger vehicles. and commercial during the first quarter of this year.
“We are considering renaming our commercial electric vehicles and supplying GM…The deal will pave the way for our entry into the North American commercial vehicle market,” Lee Seung Jo, Hyundai’s chief financial officer, said during a conference call with analysts.
The negotiations come as automakers brace for political uncertainty in the United States, the world’s second-largest auto market, that could upend demand. This week, US President Donald Trump said he could impose 25% tariffs on Canada and Mexico starting February 1.
Meanwhile, political unrest has shaken confidence at Hyundai in Seoul.
“We expect more trade uncertainties this year than ever before due to potential policy changes not only in the domestic market but also in the United States, while emissions rules will be stricter in Europe,” he said. Lee said.
Hyundai expects to see less impact from U.S. tariffs than Japanese competitors, including Toyota Motor (NYSE:) and Honda (NYSE:) Engine which has a greater manufacturing presence in Mexico and Canada.
The South Korean automaker announced plans to localize more of its production in the United States to minimize any tariff impact. The company also announced that it would manufacture hybrid vehicles at its new factory in Georgia.
SLOWDOWN IN GROWTH
Hyundai, which with its subsidiary Kia is the third largest automobile manufacturer in the world in terms of sales, on Thursday forecast growth in its turnover for 2025 of between 3.0% and 4.0%, compared to 7.7% a year earlier. It expects an operating margin of 7.0% to 8.0%, compared to 8.1% in 2024.
Hyundai flagged uncertainties including slowing major markets, slowing demand for electric vehicles and macroeconomic volatility, as Trump said he would consider eliminating tax credits for purchasing electric vehicles.
The won’s fall, which began in early December after the now-impeached South Korean president declared martial law, will boost returnee incomes but also inflate provisions for vehicle warranties, hurting profit margins , Hyundai said.
For the October-December period, Hyundai reported an operating profit of 2.8 trillion won ($1.95 billion) thanks to its spending on promotions in a slowing auto market.
This figure is lower than the 3.2 trillion won average of 24 analyst estimates compiled by LSEG SmartEstimate, which is weighted based on the most accurate analyst estimates.
During the quarter, global retail sales fell as strong sales in the United States and India were offset by sluggish demand in South Korea, Europe and China.
Hyundai shares were flat after the earnings announcement.
The automaker also said it plans to supply Ioniq 5 electric vehicles to robotaxi developer Waymo in North America and beyond. Hyundai, which is developing autonomous technology at its Motional unit, has announced plans to bring robotaxis to market next year.
The group said it is willing to list the Boston Dynamics humanoid robot unit, but will not consider the issue in the short term.
($1 = 1,436.4200 won)
