US, Japanese rivals more likely to be affected by new tariffs on Canada, Mexico
Hyundai Motor Company and Kia may end up benefiting from the US government’s 25 percent tariffs imposition on Canada and Mexico as the Korean automakers’ competitors are projected to endure more damage from the tariffs, according to auto industry analysts and experts Wednesday.
S&P Global Mobility reported that the US imported some 3.6 million light vehicles from Canada and Mexico in 2024, which accounted for about 22 percent of all cars sold there last year, pointing out that Mexico is the biggest source of US light-vehicle imports.
“Volkswagen is the most exposed to tariff risk, with over 43 percent of its US sales sourced from Mexico,” said the report.
According to S&P Global Mobility, in 2024, Nissan sourced about 27 percent of its US sales from Mexico, followed by Stellantis at 23 percent, General Motors at 22 percent, Ford at just under 15 percent and Honda at nearly 13 percent. Toyota and Hyundai sourced approximately eight percent of its US sales from Mexico.
Kia operates a manufacturing plant in Monterrey, Nuevo Leon, which is capable of rolling out around 400,000 units per year. That plant exported about 150,000 cars to the US last year, while the company produced some 250,000 vehicles with the US.
Hyundai Motor does not have a plant in Mexico.
“Hyundai Motor has the lowest amount of tariff risks among the traditional automakers,” said Moon Yong-kwon, an analyst at Shinyoung Securities.
“If the selling prices of (Hyundai and Kia’s) competing models (from rival brands) in the US increase due to the tariffs, (Hyundai and Kia) could benefit from that.”
Yoo Ji-woong, an analyst at Daol Securities, also noted that the Korean automakers have the lowest proportion of their production capacity located in Canada and Mexico among global auto brands.
Hyundai Motor Group sold record-setting 1.7 million vehicles in the US last year, up 3.4 percent from 2023, to retain the title of the fourth largest auto selling group in America behind GM, Toyota and Ford.
Although the auto conglomerate’s Korean-made vehicles currently take up about 67 percent of its US sales, Hyundai and Kia can bolster its US manufacturing capacity with the addition of Hyundai Motor Group Metaplant America, a newly built site in Georgia and the conglomerate’s third manufacturing foothold in the US, in case of US President Donald Trump's tariff blow to Korea.
The two existing plants are capable of rolling out some 600,000 units per year while the newest plant, which features an annual production capacity of 300,000 units at the moment, can be expanded to assemble up to 500,000 cars per year.
“We are considering changing our supply chain management effectively to reduce the burden of tariffs,” Kia said during the conference call over its fourth quarter earnings on January 24.
“In the short term, there could be burdens imposed by tariffs but we are preparing for them. ... There will be no impacts (big enough) to hurt our profitability.”
