Hyundai Motor has reportedly decided to raise the prices of vehicles sold in the United States after June 2nd. Following the announcement that the Donald Trump administration would impose a 25% tariff on all imported vehicles, Hyundai said it would "freeze prices until June 2nd" and has been contemplating whether to raise prices since then.
According to a Hyundai Motor Group official on the 26th, Hyundai has informed some employees in its institutional sector through a recent message that it will "consider the timing for price increases to minimize the effects of the tariff starting in June" and noted that "production adjustments by region and model have already begun in anticipation of a decrease in sales after the price increase in North America."
The Trump administration announced on March 26th (local time) that it would impose a 25% tariff on imported vehicles, which took effect on June 2nd. While the Trump administration decided to defer reciprocal tariffs for 90 days by country, this measure did not apply to automobiles as they fall under itemized tariffs.
Jose Munoz, president of Hyundai Motor, stated that despite the Trump administration's tariff imposition, prices will not be raised for the time being, setting the freeze deadline to June 2nd. Lee Seung-jo, head of Hyundai Motor's financial division, also remarked during a conference call regarding the first quarter results held last month that "the sales prices in the United States are expected to be frozen, and after June 2nd, the decision to raise prices will be made based on the situation."
Hyundai's decision not to raise prices until June 2nd was due to sufficient inventory to endure without raising prices in the United States. Additionally, the expectation that the South Korean government could negotiate with the Trump administration to adjust or exempt the tariff in the remaining two months was also reflected.
However, with recent depletion of U.S. inventory and the low likelihood of tariff adjustments by early next month, it appears that Hyundai has ultimately decided to reflect the tariff in the prices of vehicles sold in the United States. Considering it will take time for the new government to form a new negotiation team after the presidential election on June 3rd in South Korea, there are many observations suggesting that negotiations regarding automobile tariffs with the U.S. will take several months.
If Hyundai reflects the tariff in its prices, the likelihood of a decrease in sales in the United States is high. Hyundai currently manufactures internal combustion engine vehicles at its plants in Alabama, with electric vehicles produced at the eco-friendly dedicated factory, MetaPlant America (HMGMA). However, many internal combustion vehicles and most hybrid vehicles are produced domestically and exported to the U.S.
Hyundai is adjusting its overall regional production in preparation for a potential decrease in sales in its largest market, the United States. They are reallocating export volumes produced domestically to other regions and reducing production of certain models in those regions accordingly.
An official from the completed automobile industry said, "Hyundai has recently halted production of the Ioniq 5 and Kona EV at its Ulsan plant due to poor electric vehicle sales. They announced plans to produce a total of 4.234 million units, including 1.883 million units domestically and 2.351 million units overseas, but achieving this goal is not an easy situation."