Hyundai Motor Eyes Partnership with General Motors for Electric Vehicle Supply
As the automotive industry navigates uncertain times, Hyundai Motor is exploring a potential partnership with General Motors to supply commercial electric vehicles to the US market. This move comes as the South Korean automaker expects sales growth to slow down this year due to softening demand.
Tackling Policy Uncertainty
The talks between Hyundai and GM are taking place amidst policy uncertainty in the US, the world’s second-largest auto market. With President Donald Trump’s promises of import tariffs, automakers are bracing for potential disruptions to demand. Hyundai, however, believes it will be less affected by US tariffs compared to its Japanese rivals, thanks to its smaller manufacturing presence in Mexico and Canada.
Localizing Production to Minimize Tariff Impact
To mitigate the impact of potential tariffs, Hyundai plans to further localize production in the US. The company also announced plans to manufacture hybrid vehicles at its new factory in Georgia. This strategic move is expected to help the automaker reduce its reliance on imports and minimize the effects of tariffs.
Slowing Growth and New Challenges
Hyundai forecasts revenue growth of 3.0% to 4.0% in 2025, a significant slowdown from the 7.7% growth rate seen in the previous year. The company cites uncertainties such as slowing demand in major markets, decreasing electric vehicle sales, and macroeconomic volatility as key challenges. Additionally, the potential scrapping of EV purchase tax credits by the US government could further impact sales.
Expanding into New Markets
Despite the challenges, Hyundai is pushing forward with its expansion plans. The company is considering supplying its Ioniq 5 EVs to robotaxi developer Waymo in North America and beyond. Hyundai is also developing autonomous technology at its Motional unit, with plans to commercialize robotaxis next year.
Financial Performance
For the October-December quarter, Hyundai reported an operating profit of 2.8 trillion won ($1.95 billion), slightly lower than analyst estimates. The company attributed the decline to increased spending on promotions in a slowing car market. Global retail sales slipped during the quarter, with solid sales in the US and India offset by sluggish demand in South Korea, Europe, and China.
Looking Ahead
As Hyundai navigates the complex automotive landscape, the company remains committed to its growth strategy. With its sights set on the North American commercial vehicle market, Hyundai is poised to make a significant impact in the years to come.
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