Hyundai Glovis seeks agreements with Chinese entities as U.S. imposes tariffs on automobile transporters.
Rewritten Article:
Hyundai Glovis' Pyeongtaek International Terminal buzzes with export-bound cars, a testament to the industrious spirit of Korean automakers. Yet, the recent 25% tariff on auto parts by the Trump administration casts a looming shadow over their operations.
Korean companies, such as Hyundai and Kia, face daunting challenges, with the tariffs ramping up costs and potentially impacting their profitability. A substantial proportion of Korean auto parts exports head stateside, and the share of these exports has grown, reaching 36.5% last year from 29.5% in 2020 [1].
The threat of market share erosion looms large if these costs aren't managed effectively, as U.S. companies may seek cheaper alternatives [2]. However, Korean companies are as resilient as their cars. They're exploring solutions to circumvent these tariff-induced hurdles.
One strategy is to diversify supply chains, reducing dependency on U.S. imports and insulating themselves from tariff impacts [1]. Another approach is to ramp up local production in the U.S. at facilities operated by suppliers like Hyundai Mobis, Hankook Tire, and Kumho Tire [1].
Additionally, some Korean auto parts, such as leaf springs and suspension components, have been granted exemptions or tariff relief under revised measures [2]. The potential exists for Korean companies to capitalize on market shifts if U.S. automakers migrate from Chinese suppliers due to higher tariffs, boosting demand for Korean-made parts [2].
A Chinese-made BYD Shenzhen roll-on/roll-off ship, boasting 9,200 standard car slots, embarked on its maiden voyage to Brazil, filled with over 7,000 BYD electric cars from Taicang City, Jiangsu Province. The ship's arrival underscores the global reach and competitive edge of Korean companies in the face of adversity.
[Enrichment Insights (15% of content)]:- Economic Pressure: The tariffs pose a considerable challenge for Korean companies, as they increase costs and can impact profitability, especially since a substantial portion of Korean auto parts exports go to the U.S. The share of these exports increased from 29.5% in 2020 to 36.5% last year.- Market Share Loss: The tariffs could lead to a decrease in market share if costs are not effectively managed, as U.S. companies might seek alternatives to reduce expenses.
- Translated from the JoongAng Ilbo using generative AI and edited by our website staff.
- Sources: [1] Yonhap News Agency, [2] Reuters.
- The international business sector, including Korean companies such as Hyundai and Kia, are grappling with challenges due to the 25% tariff on auto parts imposed by the Trump administration, which has the potential to increase costs and impact profitability.
- The tariff controversy orchestrates daunting challenges for Korean companies, as a substantial proportion of their auto parts exports are destined for the United States, with its share reaching 36.5% last year from 29.5% in 2
- If these costs aren't managed effectively, Korean companies may experience erosion of their market share, as US companies might seek cheaper alternatives.
- Korean companies are endeavoring to navigate these tariff-induced hurdles by employing strategies like diversifying supply chains, reducing dependency on US imports, and insulating themselves from tariff impacts.
- Another strategy includes ramping up local production in the US at facilities operated by suppliers like Hyundai Mobis, Hankook Tire, and Kumho Tire.
- Even amidst these economic pressures, Korean auto parts have been granted exemptions or tariff relief under revised measures, which presents an opportunity for Korean companies to capitalize on market shifts if US automakers migrate from Chinese suppliers due to higher tariffs, thereby boosting demand for Korean-made parts.
