Due to the tariffs imposed by U.S. President Donald Trump, the manufacturing industry, including domestic and foreign automakers, is adjusting its overseas production strategies. There is a trend to reduce reliance on major production bases located outside the U.S., particularly in Mexico, or consider withdrawing from them while expanding local production in the U.S.
According to the industry on the 16th, Hyundai Motor Group recently transferred the volume of the Sport Utility Vehicle (SUV) Tucson, which had been produced at Kia's Mexican plant for sale in the U.S., to its factory in Alabama (HMMA). Instead, the volume that was being produced in HMMA for sale in Canada has been redirected to the Mexican plant.
Due to the impact of tariffs on imported vehicles imposed by President Trump, domestic and foreign automakers, including Hyundai Motor Company, are modifying their overseas production strategies centered around the U.S. Mexico was the top country for U.S. imported finished vehicle value last year, accounting for 22.9%, making it a focal point for companies.
According to the Mexican Automobile Industry Association (AMIA), Mexico produced 3,964,012 finished vehicles last year, of which 70% were exported to the U.S. Thanks to the nearshoring effect under the United States-Mexico-Canada Agreement (USMCA), Mexico has been actively attracting foreign manufacturing industries centered around finished vehicle corporations.
Hyundai Motor Group is responding to the tariff measures by increasing its share of U.S. production. The Georgia Hyundai Meta Plant America (HMGMA), which started operations in March this year, plans to scale up production from 300,000 to 500,000 units, expanding local production to about 70% of last year's U.S. sales volume (1.71 million units).
General Motors (GM) announced on the 10th (local time) that it will shift some of the vehicles it was producing in Mexico to production within the U.S. GM plans to invest $4 billion (approximately 5 trillion won) in three U.S. factories over the next two years to increase production capacity to over 2 million units.
Earlier, Stellantis temporarily halted operations at its Mexican plant as a response to the tariff and changed the production sites of some models from Mexico to the U.S. Nissan is also considering transferring or withdrawing some production from its Mexican plants, having produced approximately 670,000 vehicles in Mexico last year, exporting over 456,000 of them to the U.S. and others.
Not only finished vehicle manufacturers but also domestic corporations with production bases in Mexico, including electronics and parts, are turning their eyes to the U.S. Samsung Electronics and LG Electronics are reportedly considering moving some of the dryer and refrigerator production from their Mexican plants to the U.S. POSCO is operating an automotive steel plate plant in Mexico and has decided to build a steel mill locally in the U.S. in partnership with Hyundai Steel.
According to the Ministry of Trade, Industry and Energy and the Korea Trade-Investment Promotion Agency (KOTRA), as of early this year, there were 92 Korean corporations that had entered Mexico, of which 23 are operating local factories. More than 500 corporations have investment records in Mexico, with Korean corporations investing more than 1 trillion won in Mexico annually since 2022.