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SEOUL (Reuters) – South Korea’s Hyundai Motor (OTC:) on Thursday expected its sales growth to halve in 2025 due to slowing vehicle demand and increasing competition after it reported a 17% drop in fourth-quarter profit.
Hyundai, which along with subsidiary Kia is the world’s third-largest automaker by sales, forecast 2025 sales growth of 3.0% to 4.0% this year, up from 7.7% last year. The company expects an operating margin of 7.0% to 8.0%, down from 8.1% in 2024.
“Business uncertainties are increasing this year,” Hyundai said, citing a slowdown in key markets, slowing demand for electric vehicles and macroeconomic volatility.
Global automakers are bracing for political uncertainty in the U.S., the world’s second-largest auto market, that threatens to dampen demand as U.S. President Donald Trump said this week he could impose $25 in import tariffs starting Feb. 1 % on Canada and Mexico.
Trump also said he would consider eliminating tax credits for electric vehicle purchases.
North America and South Korea are the two largest markets for Hyundai and Kia.
Hyundai reported operating profit of 2.8 trillion won ($1.95 billion) for October and December as it spent more on promotions in a slowing auto market
The result was below the 3.2 trillion won average of 24 analyst estimates compiled by LSEG SmartEstimate, which are weighted by analyst estimates that are consistently more accurate.
Hyundai shares rose 1.4% after the earnings announcement.
During the quarter, Hyundai’s global retail sales fell as solid sales in the US and India were offset by sluggish demand in South Korea, Europe and China.
A weaker local currency against the U.S. dollar helped boost Hyundai’s repatriated profits but also increased foreign debt and related financial costs, weighing on profits, analysts said.
($1 = 1,436.4200 won)
