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Hyundai's Q3 Profit Plunge: How US Tariffs Slashed Earnings 20.5%

Hyundai Motor faced a significant 20.5% drop in third-quarter net profit, largely due to ongoing US import tariffs. The company reported earnings fell to 2.54 trillion won as 25% tariffs on Korean vehicles continued to impact performance since April. However, relief appears imminent after US President Trump agreed to reduce tariffs to 15% during summit talks with South Korea's leader. Hyundai expects this reduction will help them compete more effectively against Japanese automakers in the US market.

Key Points: Hyundai Motor Q3 Net Profit Falls 20.5% on US Tariffs

  • Third-quarter net profit declined to 2.54 trillion won from 3.2 trillion won last year
  • US 25% import tariffs have weighed on earnings since April implementation
  • Operating profit fell 29.1% despite 8.8% sales growth in the quarter
  • Company expects lower 15% tariffs will level playing field with Japanese rivals
2 min read

Hyundai Motor's Q3 net profit falls 20.5 pc on US tariffs

Hyundai Motor reports 20.5% drop in Q3 net profit as 25% US import tariffs continue to impact earnings despite recent tariff reduction agreement.

"We express our gratitude to the government for its dedicated efforts throughout the difficult negotiation process - Hyundai Motor Statement"

Seoul, Oct 30

Hyundai Motor, South Korea's leading automaker, said on Thursday its third-quarter net profit fell 20.5 per cent from a year earlier, hit by newly imposed US import tariffs that took effect in April.

Net profit for the three months ended in September declined to 2.54 trillion won ($1.8 billion) from 3.2 trillion won in the same period last year, the company said in a regulatory filing.

The company said U.S. tariffs on imported vehicles have continued to weigh on its quarterly earnings since April 2, when the U.S. government began imposing 25 percent tariffs on all imported vehicles, reports Yonhap news agency.

Currently, tariffs on Korean vehicles remain at 25 per cent, far higher than the revised 15 per cent applied to vehicles from Japan and the European Union.

On Wednesday, however, U.S. President Donald Trump agreed to lower the auto tariffs on Korean vehicles to 15 per cent during his summit with South Korean President Lee Jae Myung, as the two sides finalised details of Seoul's $350 billion investment pledge under a broader tariff deal reached in July.

Hyundai said it expects the lower auto tariffs will help the company compete on a more level playing field with Japanese carmakers and other rivals in the U.S. market.

Operating profit fell 29.1 per cent to 2.53 trillion won in the third quarter from 3.58 trillion won a year earlier, while sales rose 8.8 per cent to 46.72 trillion won from 42.92 trillion won.

"Favourable exchange rates and increased vehicle sales in major markets such as Europe and the United States helped support quarterly revenue," the company said.

In the fourth quarter, Hyundai plans to increase the share of gasoline hybrid models in its global lineup amid slowing demand for electric vehicles (EVs), while also planning aggressive new model launches next year.

Meanwhile, Hyundai Motor Group welcomed the Seoul-Washington trade deal, which cuts U.S. tariffs on imported cars from 25 per cent to 15 per cent, and vowed to continue efforts to strengthen its competitiveness.

"We express our gratitude to the government for its dedicated efforts throughout the difficult negotiation process that led to this agreement," the company said in a statement.

- IANS

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Reader Comments

P
Priya S
Interesting to see Hyundai shifting focus to hybrid models as EV demand slows. In India too, we're seeing more hybrid options from various manufacturers. Maybe this is the right approach for our market conditions.
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Sarah B
While the tariff reduction is good news, I'm concerned about the environmental impact of moving away from EVs. Climate change affects us all, and companies should maintain their commitment to sustainable mobility solutions.
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Arjun K
Hyundai makes great cars for Indian roads. Their Creta and Venue are bestsellers here. Hope these international tariff issues don't affect pricing in the Indian market. We need affordable, reliable vehicles! 🇮🇳
M
Michael C
The fact that sales actually increased by 8.8% despite the profit drop shows strong consumer demand. Hyundai's quality and brand reputation are helping them weather these policy challenges.
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Nisha Z
As someone working in the auto industry, I can say these tariff negotiations are crucial. The 25% to 15% reduction will definitely help Hyundai compete better with Japanese brands in the US market. Good for their global strategy!

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