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Hyundai Plans to Boost US Output to Offset Tariffs
CEO José Muñoz Says Localization and Cost Cuts Aim to Limit Profit Pressure
Key Takeaways:
- Hyundai Motor Co. plans to ramp up U.S. production and cut expenses to blunt tariff impacts, CEO José Muñoz said April 20 at an event in Milan.
- Tariffs of 15% on imported vehicles and Hyundai’s weakest quarterly profit in more than three years are squeezing margins amid supply disruptions and uneven electric vehicle demand.
- Localization will take years, so Hyundai plans aggressive cost cuts, price adjustments and a push for Genesis, hybrids and SUVs while shifting more capacity to North America.
Hyundai Motor Co. plans to ramp up U.S. production and cut expenses to shield the South Korean carmaker from tariffs that are eating into profit in its biggest market.
“Tariffs are hurting,” CEO José Muñoz told reporters at an event in Milan on April 20. “In the short term, it is really tough.”
Like the rest of the global auto industry, Hyundai has grappled with U.S. tariffs, along with supply disruptions and uneven demand for electric vehicles, since Muñoz took over as CEO at the start of 2025. The South Korean company reported its lowest quarterly profit in more than three years during the fourth quarter.
Increasing the number of cars Hyundai makes in the U.S. will avoid extra costs, Muñoz said. The company currently makes about half of U.S.-sold vehicles locally, importing the rest at an official tariff rate of 15%.
“We need to make efforts to avoid minimize the cost,” he said. “One of the easiest and straightforward ways to do that is to accelerate localization.”
Muñoz cautioned that localization “takes years,” and will force Hyundai to cut costs aggressively in the meantime and adjust prices to offset the immediate financial blow.
Muñoz has been pushing the premium Genesis brand, hybrids and sport utility vehicles to capture higher-margin sales. The company has continued to gain ground in the U.S., which he has described as a pillar of growth.
The comments underscore the intensifying pressure on global carmakers to overhaul their supply chains as trade barriers threaten margins.
The 60-year-old CEO said the war in Iran is creating a significant “hiccup” in the Middle East, Hyundai’s highest-margin market. Both demand and logistics are affected, forcing the company to shift more capacity to North America.
“We’re trying to offset with other regions,” he said. “Because we are a little bit limited on capacity, I can tell you that there are many volunteers now that try to get those cars. One of the regions that can accommodate is the North America region.”
