Hyundai Motor in GM tie-up talks, forecasts slower growth in 2025

January 23, 2025 (MLN): Hyundai Motor said on Thursday it is in talks with General Motors to supply commercial electric vehicles to its U.S. peer, as it expects sales growth to halve this year due to softening demand.

The South Korean automaker said discussion with GM involves various areas of cooperation including joint parts purchasing and a tie-up in passenger vehicles, according to Reuters.

They aim to sign binding deals on commercial EV supply and auto part purchases this year, Hyundai said.

The talks come as global automakers brace for policy uncertainty in the U.S., the world's second-largest auto market, which threatens to dampen demand.

This comes after U.S. President Donald Trump said this week he could impose 25% import tariffs on Canada and Mexico starting from February 1, Reuters added.

"We expect more business uncertainties this year than ever before due to potential policy changes not just in the home market but also in the U.S.," Hyundai Chief Financial Officer Lee Seung Jo told analysts.

"There will be tougher emission rules in Europe," he added.

Hyundai, which together with affiliate Kia is the world's third-biggest automaker by sales, on Thursday forecast 2025 revenue would grow 3% to 4.0% this year, versus 7.7% a year earlier.

It expects its operating margin to be 7% to 8%, from 8.1% in 2024, Reuters noted.

North America and South Korea are Hyundai and Kia's two biggest markets, it added.

Hyundai also warned of uncertainties, citing a slowdown in major markets, slowing demand for electric vehicles, and macroeconomic volatility.

Trump said this week he would consider scrapping tax credits for purchases of electric vehicles.

Hyundai reported an operating profit of 2.8 trillion won ($1.95 billion) for October-December as it spent more on promotions in a slowing car market.

That was lower than a 3.2tr won an average of 24 analyst estimates compiled by LSEG SmartEstimate, which is weighted toward estimates from the more consistently accurate analysts.

Hyundai shares were flat after the earnings announcement, Reuters further added.

During the quarter, Hyundai's global retail sales slipped as solid sales in the United States and India were offset by sluggish demand in South Korea, Europe, and China.

A weaker local currency against the U.S. dollar helped raise Hyundai's repatriated earnings but also increased foreign debt and related financial costs, weighing on profit, analysts said.

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