Hyundai Motor's 'tariff-free inventory' in the U.S. market is expected to be depleted soon, leading to imminent price increases. Tariff-free inventory refers to the quantities secured by Hyundai's North American subsidiary before the U.S. imposed a 25% tariff on imported cars. To minimize price increases, Hyundai plans to increase local production and focus on selling highly profitable hybrid vehicles. The concerns for Hyundai deepened after U.S. President Donald Trump noted on the 12th (local time) that he might increase tariffs on imported vehicles.
According to the automobile industry on the 14th, the completed vehicle stock secured by Hyundai's North American subsidiary is expected to be depleted as early as the end of this month. As of April, there was a stock equivalent to 3.1 months, but sales increased due to stockpiling demands amid concerns over price increases due to tariffs.
Other global automakers are rapidly announcing new pricing policies. Japanese Subaru raised prices on some new vehicle models by up to $2,055 (approximately 2.8 million won) starting from the 1st. U.S. Ford decided to increase prices on three models (Maverick, Bronco Sport, Mach-E) produced in Mexico by up to $2,000, while German BMW announced it would raise prices on most models sold in the U.S., excluding electric vehicles, by up to $2,500 starting on the 1st of next month.
Hyundai's market share in the U.S. is around 10%, but its recent growth has slowed. Looking at the year-over-year sales growth rate, it recorded 19% in April due to the impact of tariffs, but it decreased to 8% in May. An industry insider said, 'The U.S. is a fully competitive market with brands from all countries except China,' adding, 'As soon as prices increase, sales will take a hit.'
President Trump has openly expressed dissatisfaction with corporations passing tariff costs onto consumers. When U.S. retail giant Walmart stated that price increases due to tariffs were unavoidable, Trump pressured them to absorb the tariffs directly.
However, since Hyundai cannot bear all the tariff burden, it seems likely to raise prices soon. Approximately 65% of the vehicles sold by Hyundai and Kia in the U.S. are exports. Lee Byung-kun, a researcher at LS SECURITIES, noted, 'Prices need to be increased by about 10% after July to offset the tariff impact.' Bloomberg reported that Hyundai may 'raise transportation fees and commissions for options like floor mats and roof rails.'
Hyundai is considering measures to minimize the extent of price increases. First, the company plans to expand production at the electric vehicle plant MetaPlant America (HMGMA) in Georgia to include hybrid and internal combustion engine vehicles, maximizing its operation. As of the end of March, the operational rate was 102%. This means that the operational rate exceeding 100% indicates there were night shifts and overtime.
Additionally, efforts are being made to boost sales of highly profitable hybrid vehicles. From January to May this year, Hyundai and Kia's hybrid vehicle sales reached 114,373 units, a 53% increase compared to the same period last year (75,227 units).