Hyundai, Kia to Announce Q1 Earnings Drop Amid U.S. Tariffs and Won Fluctuations

Hyundai Motor Co. and Kia Corp. are expected to report significant declines in first-quarter earnings due to the combined impact of U.S. import tariffs and fluctuations in the Korean won. Kia’s net profit fell 23.5% to 1.83 trillion won ($1.2 billion), while Hyundai's operating profit declined 30.8% to 2.51 trillion won, as tariffs imposed by the U.S. weighed on profitability, according to the Korea Times.

Despite the profit drops, both automakers reported higher sales during the quarter. Hyundai's revenue increased by 3.4% to 45.94 trillion won ($30.4 billion), and Kia posted record sales of 29.5 trillion won. However, Hyundai experienced a 2.5% decline in vehicle sales volume attributed to tariff-related market disruptions, as reported by the Korea Times and Korea Herald.

U.S. tariffs on imported vehicles, which started at 25% and later were reduced to 15%, resulted in estimated losses of around 860 billion won for Hyundai in Q1. Currency effects also affected earnings; Kia cited the weakening Korean won as a significant factor contributing to its operating income decline of 26.7%, while market analysis noted that won appreciation similarly pressured Hyundai's profitability.

Forecasts compiled by securities firms over the past three months indicate continued earnings challenges despite solid sales growth, with Hyundai’s operating profit projected to fall by approximately 23.3%, and Kia’s operating profit expected to drop by around 22.6%. Industry sources in Seoul emphasize that the U.S. tariffs and fluctuating exchange rates remain key headwinds as South Korea's largest automakers navigate the global market.

Looking ahead, market watchers will focus on how Hyundai and Kia manage these external pressures in the coming quarters, including potential adjustments to their pricing strategies, production volumes, and currency hedging. Further changes in U.S. trade policies or shifts in currency value could have material effects on their financial performance going forward.