Hyundai Motor reported a 15.8% decline in second-quarter operating profit as U.S. tariffs cost the company 828 billion won ($606 million), underscoring the mounting pressures facing South Korean automakers from Washington’s trade policies.
The company posted operating profit of 3.6 trillion won ($2.6 billion) for the April-June period, down from 4.3 trillion won a year earlier. Revenue climbed 7.3% to a record 48.3 trillion won ($35.1 billion), beating analyst estimates of 47 trillion won.
Chief Financial Officer Lee Seung-jo warned the tariff impact will be larger in the third quarter, as the full effect of the 25% levies on Korean vehicle imports takes hold. The automaker expects tariff rates to “go down a little” from current levels but remains uncertain about the magnitude of any reduction.
The results highlight Hyundai’s vulnerability to trade tensions, with the U.S. market generating over 40% of total revenue. The company has been forced to slash prices and offer aggressive incentives to defend its 5.9% U.S. market share against the tariff headwinds.
Despite the profit squeeze, global vehicle sales rose 0.8% to 1.07 million units, the highest quarterly level since 2020. Sales of eco-friendly vehicles jumped 36.4% to 262,126 units, driven by strong hybrid demand that helped offset declining electric vehicle sales.
The company maintained its annual guidance for 3-4% revenue growth and 7-8% operating margin, though it plans to update forecasts once tariff negotiations between Seoul and Washington conclude. Hyundai shares fell 2% following the earnings announcement.
The automaker is betting on localized U.S. production to mitigate future tariff exposure, with plans to produce 70% of American-bound vehicles domestically by 2028 through its Georgia manufacturing facility.
