Hyundai Motor and Kia Lose 3 Trillion Won in Profit Due to U.S. Tariffs... Improvement Expected from Next Month

Hyundai Motor Company: 1.8 Trillion Won Decrease
Kia: 1.2 Trillion Won Decrease

Hyundai Motor Company and Kia saw their operating profit drop by more than 3 trillion won in the third quarter of this year due to the impact of U.S. tariffs.

Kia announced on the 31st that its consolidated operating profit for the third quarter of this year was 1.4622 trillion won, a decrease of 49.2% compared to the same period last year.

Kia explained, "The application of a 25% U.S. tariff resulted in a profit reduction of 1.234 trillion won," and added, "Excluding the impact of tariffs, the cost-to-sales ratio for the third quarter would have been 76.8%, which is in line with the level of the third quarter last year."

Sales reached 28.6861 trillion won, an increase of 8.2% compared to the same period last year, marking the highest quarterly sales ever recorded.

Previously, Hyundai Motor Company also stated in its earnings announcement the previous day, "Due to the impact of tariffs in the third quarter, we incurred an operating loss of 1.8 trillion won," and added, "We partially offset the impact of the tariffs through the active implementation of a preemptive contingency plan."

However, as the governments of South Korea and the United States have agreed to lower automobile tariffs from 25% to 15%, Hyundai Motor Company and Kia are expected to see their tariff burden reduced as early as next month. In particular, this will allow them to compete on an equal footing with Japanese and European brands in the U.S. market.

Hyundai Motor Company stated, "The conclusion of the tariff negotiations not only eliminates uncertainty and allows for more predictable business operations, but also has positive effects beyond the financial aspect."

Meanwhile, the combined sales of Hyundai Motor Company and Kia for the third quarter of this year totaled 75.4075 trillion won, with a combined operating profit of 3.9995 trillion won. The combined operating margin stood at 5.3%. Compared to the third quarter of last year, combined sales increased by 8.6%, while operating profit decreased by 37.4%.