The administration of Donald Trump in the United States has imposed a 25% tariff on imported cars, leaving automobile companies scrambling to devise countermeasures. Some companies have halted operations at overseas factories and began workforce restructuring. Hyundai Motor Group plans not to pass on the increased tariffs to prices but is contemplating counterplans in case high tariffs persist for an extended period.
According to the completed car industry on the 9th, U.S. automaker Stellantis recently decided to temporarily halt operations at factories in Canada and Mexico. The assembly plant in Ontario, Canada, has been closed for two weeks, and the assembly plant in Toluca, Mexico, will stop operations until the end of the month.
Nine hundred employees working at five parts factories in the United States have also been temporarily laid off. Stellantis manufactures key components in U.S. factories and assembles them in Canada and Mexico for sale. With the suspension of operations at completed car assembly plants, the workload at U.S. parts factories disappeared, causing employees to lose their jobs.
General Motors (GM) has decided to increase pickup truck production at its Fort Wayne plant in Indiana. GM manufactures light pickups like the Chevrolet Silverado and GMC Sierra in the United States, Canada, and Mexico. GM plans to maximize the use of finished car production facilities in the U.S. to mitigate the impact of the tariffs.
Japanese automaker Nissan also plans to minimize export reductions caused by tariffs by utilizing U.S. factories. Nissan had planned to reduce production at its two completed car plants in the U.S. starting this month due to prolonged poor performance, but retracted this plan when the high tariff measures came into effect. Furthermore, reports indicate that it is considering transferring the production of the subcompact SUV Rogue, currently manufactured in Japan for export to the U.S., to the United States.
The companies hit hardest by the imposition of tariffs by the Trump administration are those without factories in the U.S. These corporations have temporarily suspended exports to the U.S. or are using stock vehicles as much as possible to respond. However, until the tariff imposition is lifted or the rates are adjusted, there is a high chance of a sharp decline in sales in the U.S., causing significant anxiety.
According to the New York Times (NYT), the British luxury car brand Jaguar Land Rover has decided to suspend shipments of cars to the United States for the month of April. Jaguar Land Rover has completed car factories in the United Kingdom, Brazil, and Slovakia. In the case of Germany's Audi, it has suspended vehicle deliveries in the U.S. and prioritized selling stock vehicles. Unlike competing German brands like Mercedes-Benz and BMW, Audi does not have factories in the U.S., making it a direct hit from the Trump administration's tariff imposition.
The NYT analyzed that for finished car brands without factories in the U.S., like Jaguar Land Rover and Audi, the impact of the tariffs could raise U.S. sales prices to as much as $20,000 (approximately 30 million won) per vehicle.
Hyundai Motor Group has the Hyundai Alabama plant and the Kia Georgia plant in the United States. As of October last year, the 'Metaplant America (HMGMA)' plant, a facility for environmentally friendly car production, was also operational in Georgia. However, Hyundai Motor Group's local production ratio is lower than competitors like Toyota and GM, making it more susceptible to the shock of tariffs.
Hyundai Motor Group still maintains its stance of not raising vehicle prices in the United States. Jose Munoz, president of Hyundai, stated at the '2025 Seoul Mobility Show' on the 3rd in Goyang, Gyeonggi Province, “We have no plans to raise prices in the U.S.”
However, if the tariff imposition continues for an extended period, price increases may become unavoidable. Most hybrid cars, which are rapidly increasing sales in the U.S., are manufactured in Korea and exported. If tariffs are not reflected in prices, performance will deteriorate.
An official from the completed car industry said, “Sales of Hyundai and Kia electric vehicles dropped by 12.6% year-on-year in the U.S. last month, showing sluggish sales, while hybrid car sales surged by 61.1%. Hyundai Motor Group plans to reduce the proportion of electric vehicles at HMGMA and advance the launch timing of hybrid cars as much as possible to mitigate the tariff impact.”