Hyundai Motor (005380.KS) said on Thursday it is in talks with General Motors (GM.N) 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. 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, that threatens to dampen demand, as U.S. President Donald Trump said this week he could impose 25% import tariffs on Canada and Mexico from Feb. 1.
"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., while there will be tougher emission rules in Europe," Hyundai Chief Financial Officer Lee Seung Jo told analysts.
Hyundai, which together with affiliate Kia (000270.KS) is the world's third-biggest automaker by sales, on Thursday forecast 2025 revenue would grow 3.0% to 4.0% this year, versus 7.7% a year earlier. It expects its operating margin to be 7.0% to 8.0%, from 8.1% in 2024.
North America and South Korea are Hyundai and Kia's two biggest markets.
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 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 3.2 trillion won 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.
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.
($1 = 1,436.4200 won)
