Hyundai Motor Q4 profit skids due to US tariffs, but humanoid robot hope boost shares
A logo of Hyundai Motors is seen during the launch of the new Alcazar, an SUV, in New Delhi, India, September 9, 2024. REUTERS/Priyanshu Singh
SEOUL, Jan 29 : Hyundai Motor on Thursday warned U.S. tariffs would continue to hurt its financials this year, after they led it to report a worse-than-expected 40 per cent plunge in fourth-quarter operating profit.
South Korea's largest automaker said, however, it aimed to improve margins and revenue this year and increase spending on development of robotics and autonomous vehicles, sending its shares up 7 per cent.
Hyundai reported operating profit of 1.7 trillion won ($1.19 billion) for the October-December period, far below a 2.7 trillion won LSEG SmartEstimate.
Besides tariffs, earnings were also weighed down by increased sales incentives to reduce inventory of electric vehicles in the United States with the end of EV subsidies late last year.
This marks the third consecutive decline in quarterly profit for Hyundai, hit by 25 per cent tariffs on imported autos imposed by President Donald Trump's administration in April, eventually reduced to 15 per cent in November after a trade deal with Seoul.
On Tuesday, Trump said he would hike tariffs on autos and other imports from South Korea because of a delay in enacting that trade deal.
"Hyundai Motor expects the challenging global market conditions to continue this year, due to stagnant growth in the industry and intensifying competition across emerging markets," the company said.
Financial hit from tariffs amounted to 4.1 trillion won in 2025, far exceeding the 1.7 trillion won gain earned from a weaker local currency.
In response to U.S. tariffs, Hyundai plans to boost capital spending by nearly a third to 9 trillion won this year to help finance its U.S. capacity expansion, the company said.
Hyundai, which together with affiliate Kia is the world's third-biggest automaking group by sales, aims to improve operating profit margin to between 6.3 per cent and 7.3 per cent this year from 6.2 per cent last year by boosting vehicle shipments and increasing sales of higher-end models.
HUMANOID ROBOTS
Hyundai shares rallied nearly 70 per cent so far this year, outperforming South Korean broader market's 22 per cent gain, driven by enthusiasm for its humanoid robot plan and U.S. tariff cuts in November.
Hyundai said in January that it planned to deploy humanoid robots at car factories starting 2028, with a goal to build a factory capable of making 30,000 robot units annually by that year.
Its U.S. rival Tesla said on Thursday it would double capital spending this year to shift investment to yet unproven business lines such as fully autonomous vehicles and humanoid robots.
But Tesla CEO Elon Musk said recently that early production rate of its humanoid robot Optimus will be "agonizingly slow."
($1 = 1,426.2900 won)
