Hyundai hopes foreign leadership means smooth sailing in 'Trump storm'

José Muñoz, the new CEO of Hyundai Motor, speaks at the LA Auto Show in California on Nov. 21. [HYUNDAI MOTOR]

 
[NEWS IN FOCUS]
 
With less than a month left to go until the start of the second Donald Trump era, Hyundai Motor made the unconventional decision of naming a foreign CEO in a move to carry out make-or-break objectives to respond to the U.S. president-elect's hostility toward clean cars.
 
José Muñoz, who took the helm on Wednesday, faces a pile of tough tasks for the world’s third-largest automaker as Trump warns of stricter tariffs on Mexican-made vehicles along with moves to repeal incentive programs for EVs.
 

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It's the first time in Korea's history for a major conglomerate to appoint a foreign national to head a company, hinting at how seriously Hyundai is banking on the U.S. market.
 
The United States stands as the biggest market for Hyundai Motor and Kia, where one in four new cars were sold this year.
 
The carmaker also promoted Sung Kim, a former U.S. diplomat, to president to lead the company’s strategic planning division in a move widely expected to expand lobbying efforts for an extension of generous tax credits for EVs and hybrid vehicles.
 

Hyundai Motor Group Executive Chair Euisun Chung, left, and Sung Kim, head of the strategic planning division, talk at CES 2024 in Las Vegas on Jan. 9, 2024. [NEWS1]

Risk-hedging against 'Trump storm’
 
The key roles of Muñoz and Kim will likely concentrate on defending Hyundai’s sales in the U.S. market, even in the worst scenario of Trump's shake-up of Joe Biden-pushed clean energy policies, which has come to be called the "Trump storm."
 
Hyundai has invested more than $16 billion in the United States over the last four years, mostly to qualify for the Inflation Reduction Act (IRA), which includes up to $7,500 in tax credits for EV buyers.
 
Trump also declared that he would implement 25 percent tariffs on all imports from Mexico, where Kia has been operating a factory that produces the Forte and K4 sedans. The two models account for 18 percent of Kia’s total sales in the U.S. market.
 
“From tariffs to incentives and regulations, a huge shift is forecast in the Trump era in policy aspects, with Trump declaring he will kill the EV mandate on day one,” said Kang Gu-sang, an associate research fellow at the Korea Institute for International Economic Policy.
 
“Korean companies must secure flexibility in their U.S. businesses to respond to the mounting uncertainties,” Kang added. “In the case of Hyundai, it planned to add a hybrid vehicle production line in its Georgia factory.”
 
In fact, Muñoz said he is “prepared for all scenarios” for the U.S. market through Hyundai’s “flexible production scheme” during a press interview at the LA Auto Show in California on Nov. 21.
 
A U.S. citizen born in Spain, Muñoz is the author behind Hyundai’s speedy growth in global markets, rising to become the No. 3 automaker as it beat General Motors and Stellantis. He is a veteran auto expert who has experience working at major global brands including Toyota and Nissan.
 
Muñoz is typically credited for the inclusion of Hyundai’s lease cars in eligibility for up to $7,500 in tax credits under the IRA.
 
Under Muñoz, sales of Hyundai units in North America skyrocketed 170 percent to 40.8 trillion won ($27.8 billion) as of last year from 2018, while it swung to 2.8 trillion won of net profit from a 330 billion won net loss.
 
Its vehicle sales in terms of units rose 30 percent to 870,000 during the same period.

Jose Munoz, the new CEO of Hyundai Motor, introduces Ioniq 9 at an unveiling event held in Los Angeles in California on Nov. 21. [HYUNDAI MOTOR]

Boosting Washington clout with Trump-linked lobbyists
 
Sung Kim's appointment is in line with Hyundai's latest moves to expand lobbying efforts and recruit lobbyists who have ties to Trump.
 
Kim will lead the Global Policy Office, which Hyundai has recently expanded into a division from a unit that coordinates the company’s overseas activities.
 
“Trump much values personal associations and pursues a top-down approach, and this is probably why Hyundai made a big bet with Sung Kim,” said Kim Dae-jong, a business professor at Sejong University.
 
“Kim has a wide network of U.S. politicians with his experience as a U.S. diplomat, so he must play a key role in reining in Trump’s rigid tariffs and help Hyundai boost sales in the U.S. market.”
 
Since joining the U.S. foreign service in 1988, Kim has served in various key roles in the former Barack Obama administration, Trump’s first term and the Biden administration. Kim also previously served as the U.S. Ambassador to Korea from 2011 to 2014 before working as the U.S. special representative for North Korea, and has served as an adviser for Hyundai Motor since January 2024.
 
Kim will work closely with Hyundai lobbyists who possess a Washington background including Robert Hood, a former U.S. assistant secretary of defense for legislative affairs who joined the automaker earlier last year as the vice president of government affairs based in the company's Washington office, and lobbyist Julie Herbert.
 
Hyundai Motor, Kia and their subsidiaries spent a total of $2.51 million in lobbying expenditure this year through the end of September, up 60 percent during the same period in 2020 at $1.57 million ahead of the presidential election, according to data from lobbying-tracking firm OpenSecrets.
 
The number of lobbyists also almost doubled to 46 as of this year.

BY SARAH CHEA [chea.sarah@joongang.co.kr]