Hyundai Motor, the pride of South Korea’s car industry, just faced a rough patch. The company’s second-quarter (April to June) profit fell by 16% compared to last year. And the main reason? Heavy US tariffs on cars and parts.
Even though Hyundai is still doing better than many global automakers, these new U.S. taxes are starting to hurt its wallet.
A Big Hit, But Not a Knockout
In Q2, Hyundai Motor posted an operating profit of 3.6 trillion won (about $2.64 billion). That’s a solid number, but still down from 4.28 trillion won in the same period last year.
The company was expected to earn around 3.5 trillion won, according to a SmartEstimate by LSEG (which gives more weight to analysts with a good track record). So the result wasn’t shocking. But it was still a drop.
US Tariffs = Real Trouble
Hyundai said that US tariffs cost them 828 billion won in this quarter alone. That’s nearly $610 million—money that could have been spent on R&D or electric vehicle upgrades.
The company made it clear that these tariffs are now a major risk to its business. And if they stay or get worse, it could slow down future growth.
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Sales Are Up. But Costs Are Up Too.
Interestingly, even with the tariff troubles, Hyundai’s revenue rose by 7% from last year. They made 48.3 trillion won this quarter, beating the analyst forecast of 47 trillion won.
So people are still buying Hyundai cars. The problem is, making and selling them in the U.S. is getting more expensive.
Hyundai Isn’t Backing Down
Despite the drop in profit, Hyundai Motor is not changing its yearly goals. The company says it will keep working to meet its targets.
But markets didn’t like the news. After the earnings report, Hyundai shares fell 3.2%. Investors clearly have concerns about what lies ahead.
Hyundai Motor, along with its sister brand Kia, is the third biggest car group in the world. But even giants can stumble when political moves affect trade.
The U.S. tariff wall is not going away soon, and companies like Hyundai will have to find smart ways to deal with it—either by moving production, changing supply chains, or raising prices.
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