Hyundai Motor Company has revised its operating profit margin target for 2025 downwards, from a previously announced 7-8% to a new range of 6-7%. The adjustment comes as the automaker grapples with the financial impact of US tariffs on its operations.
According to a report by Jadeh Makhsous news agency, despite the short-term revision, the company maintains a positive long-term outlook. Hyundai anticipates its profit margin will recover to 7-8% by 2027 and further improve to 8-9% by 2030. To achieve this, the company is significantly expanding its manufacturing footprint in the United States, with its Georgia plant projected to reach an annual production capacity of 500,000 hybrid and electric vehicles by 2028.
Following a recent incident at the company’s battery plant in Georgia, Hyundai Motor CEO Jose Munoz expressed hope that the US and South Korea can find solutions for short-term business travel for specialized workers.
Shin Yoon-cheol, an analyst at Kiwoom Securities, stated that Hyundai’s plan to locally produce 80% of the vehicles it sells in the US could help mitigate tariff effects. However, he cautioned that this significant increase in US production could become a fixed-cost burden if tariff policies change in the future.
According to Jadeh Makhsous, the automaker also plans to expand its global hybrid vehicle lineup to over 18 models by the end of the decade. Furthermore, Hyundai will launch extended-range electric vehicles in 2027 and its first mid-size pickup truck in North America before 2030. The Georgia plant is slated to produce a combination of 10 different hybrid and electric models.
The financial toll of the tariffs is already evident. Hyundai Motor reported that US tariffs cost the company 828 billion won ($606.37 million) in the second quarter of this year, with an even greater impact expected in the third quarter.
What are your thoughts on Hyundai’s strategy to focus on local production in the US market? Share your perspective in the comments below.
