Vehicles awaiting export (Image courtesy of Yonhap)
SEOUL, July 21 (Korea Bizwire) — Hyundai Motor and Kia are forecast to post lackluster second-quarter earnings this week, as newly imposed U.S. tariffs on specific automotive categories weigh on profitability despite modest revenue growth.
According to South Korean auto industry sources on Monday, Hyundai is scheduled to announce its Q2 results on July 24, followed by Kia on July 25. A consensus of analysts compiled by Yonhap Infomax projects Hyundai’s second-quarter revenue at 46.48 trillion won ($33.3 billion), up 3.2% from a year earlier, but operating profit is expected to decline 16.5% year-on-year to 3.57 trillion won ($2.56 billion).
If realized, the decline would mark Hyundai’s first double-digit percentage drop in operating profit since the third quarter of 2020, when quality-related costs dragged the company into the red.
Kia, a fellow Hyundai Motor Group affiliate, is also expected to report weaker performance. Analysts estimate Kia’s Q2 revenue will rise 5.4% year-on-year to 29.06 trillion won, while operating profit is projected to fall 17.7% to 2.99 trillion won.
This downward trend comes after both automakers posted record-breaking earnings throughout last year. Kia’s first-quarter operating profit this year had already slipped 12.2% from the same period in 2024, signaling a sustained deceleration.
Hyundai Motor headquarters in Yangjae-dong (Image courtesy of Yonhap)
Analysts attribute the profit squeeze primarily to the 25% tariff imposed by the U.S. starting in April, which has significantly raised the cost of exporting vehicles to the American market. The combined decline in Q2 operating profit for Hyundai and Kia compared to last year is estimated at approximately 1.3 trillion won—roughly in line with the added tariff burden.
Looking ahead, the automakers are expected to mitigate the impact through local production at facilities like Hyundai Motor Group Metaplant America (HMGMA) and potential price hikes in the U.S. market. Expanding local output is seen as critical to preserving margins in the face of ongoing trade frictions.
At the same time, intensifying EV competition in Europe and surging demand for new models in India are prompting calls for revised regional strategies.
“While tariff-related volatility persists, the key issue is U.S. market share,” said Kim Jin-seok, an analyst at Mirae Asset Securities. “The American auto market appears to be entering a reshuffling phase, and Hyundai Motor Group has a strong chance of expanding its share amid the disruption.”
Kevin Lee (kevinlee@koreabizwire.com)
