Hyundai won't raise prices in response to new US tariffs, says boss

Hyundai boss José Muñoz has promised to “not raise prices” and instead swallow new 25% US import tariffs that have come into effect.

Speaking at the Seoul motor show in Korea, Muñoz confirmed that while the brand was “still assessing” the announcement, it would not impact customers.

The US is a “very, very important market” for Hyundai, Muñoz said. Last year, 20% of its 4.14 million sales were in the US. 

He said: “We saw the announcement earlier this morning [in Korea]. It was not a surprise. We are not looking at it in the shorter term but instead in the longer term.”

He added: "We need to offer a competitive product. We are not going to increase prices.”

His comments follow the news late on 2 April that, despite threats of retaliation and inter-governmental talks, US president Donald Trump has pushed through with a new 25% import tariff on all non-US-made cars. An identical levy on car parts will follow in the future.

Around half of the cars Hyundai sells in the US are made there. Much of its production takes place in South Korea but  it also has a number of other plants spread across the world.

For example, the Tucson, its best-seller in the US, is made for the US market in Alabama. The plant also builds local-market Elantra, Sonata, Santa Fe and Santa Cruz models. While Hyundai will avoid import taxes on these cars, levies on parts are likely to impact the Korean firm.

Such is the importance of the US market to Hyundai that last year it announced plans to pump £16 billion into its US operations to increase its vehicle production there, including a new steel manufacturing plant. The move forms part of a wider effort to spread production globally.