Hyundai Ioniq 5 N (Image courtesy of Yonhap)
SEOUL, Sept. 23 (Korea Bizwire) — Hyundai Motor Group’s business portfolio and financial health compare favorably with those of major global automakers, but industry analysts warn that South Korea’s auto industry could lose ground unless Seoul secures a reduction in U.S. tariffs, now set higher than those for Japanese rivals.
According to a report released Tuesday by NICE Investors Service, Hyundai and Kia derived 65.1 percent of their sales last year from advanced markets — including the United States, Canada, Western Europe, Korea and Japan.
That share outpaced Toyota’s 59.2 percent, General Motors’ 55.6 percent and Volkswagen’s 49.4 percent, underscoring Hyundai’s strong exposure to high-margin regions.
The group also leads in the share of high-value trims, such as SUVs and Genesis luxury models. As of June, 68.5 percent of Hyundai and Kia’s sales came from premium trims, compared with GM’s 65.1 percent, Toyota’s 63 percent and Volkswagen’s 55.1 percent.
Hyundai Motor headquarters in Yangjae-dong (Image courtesy of Yonhap)
Financially, Hyundai and Kia stand alongside Toyota as the most stable among global peers. At the end of June, Hyundai’s debt-to-equity ratio was 63.8 percent and Kia’s 64.6 percent — slightly higher than Toyota’s 54.6 percent, but well below Volkswagen’s 114.5 percent and GM’s 180.4 percent.
Combined net cash holdings of 30.9 trillion won ($22 billion) also rivaled Toyota’s 32.9 trillion won, while Volkswagen and GM carried far weaker balance sheets.
If tariffs on exports to the United States were equalized at 15 percent for Korea, Japan and Europe, Hyundai’s operating margin would lead the industry, projected at 8.2 percent versus Toyota’s 8.1 percent, GM’s 5.8 percent and Volkswagen’s 4.8 percent. That calculation assumes Hyundai’s new Georgia plant, capable of producing 300,000 units annually, is fully operational.
This photo provided by Hyundai Motor Group shows Executive Chair Euisun Chung (R) posing for a photo with Toyota Chairman Akio Toyoda at the Toyota Stadium in Aichi Prefecture, Japan, on Nov. 24, 2024. (Image courtesy of Yonhap)
But unlike Japan, which recently secured a tariff cut to 15 percent, Korean automakers still face the original 25 percent U.S. rate. Analysts warn that the 10-point gap could undermine Hyundai’s hard-won competitiveness.
“A sustained tariff disadvantage would erode the effectiveness of Hyundai’s strong fundamentals,” said one industry official. “For the Korean auto ecosystem to remain viable, Seoul must move quickly to ensure the same 15 percent rate applies.”
Kevin Lee (kevinlee@koreabizwire.com)
