Hyundai Motor's stock surged by as much as 7.5%, marking its largest increase since early August. This rise comes on the heels of the company's announcement of a substantial investment plan in the United States, which has raised market expectations that Hyundai might avoid potential U.S. tariffs on South Korean automobiles. Kia Motors also saw a significant stock increase, climbing by 4.3%.
The investment plan includes approximately $21 billion to be allocated by 2028, aimed at boosting car production and other projects in the U.S. This move was praised by U.S. President Donald Trump and is seen as a strategic effort by Hyundai to mitigate the impact of potential tariffs. According to SK Securities analyst Yoon Hyuk Jin, if a 25% tariff were imposed, Hyundai and Kia could face an annual profit decline of up to 10 trillion Korean won. Thus, the company has opted to expand its investments in the U.S. as a cost-saving measure instead of incurring tariff expenses.
Hyundai's proactive strategy reflects its commitment to maintaining competitiveness in the U.S. market and avoiding additional costs that could arise from international trade tensions. By investing in the U.S., Hyundai not only strengthens its production capabilities but also aligns itself with local economic interests, potentially shielding itself from future tariff implementations.
