World's No. 3 Carmaker Sees Tariffs as Opening for More US Growth
By Reuters | 25 Jul, 2025

Kia and Hyundai expect to gain US market share as rivals are forced to raise prices due to tariffs.

Automobiles are shown for sale at a KIA car dealership in Irvine, California, U.S., March 27, 2025. REUTERS/Mike Blake/ File Photo

South Korea's Kia Corp said on Friday that it aims to increase its U.S. sales and market share in the second half, driven by sales of new hybrid and gasoline vehicles and as some rivals are expected to raise prices to cope with tariffs. 

Kia, which together with affiliate Hyundai Motor ranks as the world's no. 3 carmaker, said its operating profit in the second quarter slumped by a quarter as it took a hit of 786 billion won ($570 million) from U.S. tariffs and warned of a bigger blow in the second half. 

Still, it increased April-June U.S. sales by 5% as consumers brought forward some car purchases due to concerns that U.S. tariffs would lead to higher vehicle prices. Kia also credited solid sales of its new Carnival hybrid sport utility vehicles for the rise.

It said it aimed to increase its U.S. sales by 7% to 8% in the second half of the year even as overall auto sales in the U.S. market are expected to slump by 10%, leading to a gain in market share to over 6% from 5.1% in the first half.

It expects Carnival and K4 small car sales to drive the gains while some Japanese automakers are raising prices.

While Kia and Hyundai import about two-thirds sold in the U.S. market, making them more exposed to U.S. tariffs than major rivals, Kia said on Friday that it has not yet made detailed plans to raise prices, instead focusing on growing its U.S. business. 

"We believe that we will be able to use the difficult environment as a good opportunity to level up (our market share and sales), and that's Kia's strength," Kia chief financial officer Kim Seung-jun said during a conference call. 

Samsung Securities analyst Esther Yim said Kia's strategy to boost sales of hybrids, which are imported from South Korea, could weigh on its profit, but that could be in part offset by Kia's efforts to limit the impact. 

To mitigate tariffs' effects, Kia's South Korean factories will divert some of its shipments from the United States to other markets, such as Canada, the carmaker said. 

Kia also said its U.S. factory in Georgia aims to shift some electric vehicle production to other vehicles like Sportage, Sorento and Telluride, as the United States is set to end its EV subsidies at the end of September. 

Kia shares were down 0.9%. 

($1 = 1,378.0800 won)

(Reporting by Hyunjoo Jin and Heekyong Yang; Editing by Christian Schmollinger, Tom Hogue and Tomasz Janowski)