Hyundai Mexico Adjusts Export Strategy Due to Arrival of Tariffs
Hyundai Mexico has confirmed that the Tucson SUV will continue to be manufactured at Kia’s plant in Pesquería, Nuevo León, but will no longer be exported to the United States due to tariff measures that increase costs. The automaker plans to reallocate components and production from the United States, previously destined for Canada, to Mexico, which will now supply other countries with trade partners.
Background on Hyundai and its Relevance
Hyundai Motor Group is a multinational automotive manufacturer headquartered in Seoul, South Korea. It is the second-largest Hyundai group company behind the Hyundai Motor Company, with Kia as its subsidiary. The group has a significant global presence and is known for manufacturing a wide range of vehicles, including passenger cars, commercial vehicles, and electric vehicles. Hyundai’s relevance stems from its continuous innovation, expansion into new markets, and commitment to sustainability.
Impact on Hyundai’s Production and Exports
Hyundai Mexico has been producing the Acent Hatchback and sedan models at Kia’s Pesquería plant for export to the United States, Canada, Panama, and Honduras. However, recent trade tensions have prompted the company to adjust its production strategy.
- Shift in Production: Hyundai will now manufacture components previously destined for the United States in Mexico, which will then supply other countries with trade partners.
- Export Changes: The Tucson SUV, previously exported from Mexico to the United States, will now be directed towards other markets such as Canada.
- New Commitments: In March 2025, Hyundai pledged to invest $21 billion in the United States over the next four years, including building a steel plant in Louisiana.
Key Questions and Answers
- Q: Why is Hyundai Mexico changing its export strategy?
A: Due to rising tariffs and trade tensions, Hyundai Mexico is adjusting its production strategy to reduce costs and dependence on external factors.
- Q: What models does Hyundai Mexico produce at Kia’s Pesquería plant?
A: Hyundai Mexico produces the Acent Hatchback and sedan models at Kia’s Pesquería plant, which are exported to the United States, Canada, Panama, and Honduras.
- Q: How will Hyundai’s new investment in the United States impact its operations?
A: Hyundai’s $21 billion investment in the United States includes building a steel plant in Louisiana, which will support its growth and commitment to the North American market.
Additional Context
The adjustments come as Hyundai navigates a complex global trade environment, with rising tariffs and shifting geopolitical landscapes. By reallocating production within its existing trade partnerships, Hyundai aims to maintain competitiveness and minimize the impact of external factors on its operations. This strategic move also highlights Hyundai’s commitment to diversifying its manufacturing and export bases, ensuring long-term stability and growth.
