Seoul: Hyundai Motor Co., South Korea's leading automaker, announced a significant drop in its fourth-quarter net profit, revealing a 52.1 percent decrease from the previous year, attributed largely to the impact of U.S. import tariffs.

According to Yonhap News Agency, the net profit for the three months ending in December plummeted to 1.18 trillion won (US$830.3 million) from 3.11 trillion won in the same period of 2024. This outcome fell substantially below market expectations, where analysts had projected an average net profit of 2.35 trillion won, based on a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company's operating profit also saw a decline, dropping 39.9 percent to 1.69 trillion won in the fourth quarter from 2.82 trillion won the previous year. However, sales experienced a slight increase of 0.5 percent, climbing to 46.83 trillion won from 46.62 trillion won.

For the entirety of 2025, Hyundai's net profit decreased by 21.7 percent to 10.36 trillion won, down from 13.2 trillion won in the prior year. The operating profit was similarly affected, decreasing by 19.5 percent to 11.46 trillion won from 14.23 trillion won, while sales rose by 6.3 percent to reach 186.25 trillion won.

The downturn in profits comes in the wake of a trade agreement struck last year, wherein the United States initially reduced tariffs on auto imports from South Korea to 15 percent from 25 percent. This reduction was in exchange for South Korea's commitment to invest $350 billion in the U.S. However, recent developments have seen U.S. President Donald Trump announce plans to reinstate the 25 percent auto duties on South Korean vehicles, citing delays in legislative support from Seoul to implement the trade deal.

Hyundai's global vehicle sales for the year numbered 4,138,389 units, marking a slight decrease of 0.1 percent from 2024. This decline was amid slowing global demand, increased competition, and external uncertainties. Despite this, the automaker observed robust growth in its eco-friendly vehicle segment, with sales reaching 961,812 units in 2025, a 27 percent increase from the previous year.

A Hyundai Motor official highlighted that 2025 was fraught with challenges due to weakening global demand, intensified competition in key markets, and aggressive expansion by Chinese automakers, coupled with tariff-related uncertainties. The U.S. tariffs alone resulted in costs of 4.1 trillion won, and when combined with expenses incurred by affiliate Kia Corp., the Hyundai Motor Group's total tariff-related financial burden in the U.S. amounted to 7.2 trillion won.

Despite these challenges, the official noted that the company achieved sales growth surpassing previous guidance through strategic vehicle mix improvements and flexible strategies across various powertrains. Looking ahead, Hyundai has set a global sales target of 4,158,300 vehicles for 2026, aiming for a 1-2 percent consolidated sales growth from 2025.