General Motors’ (GM) plant in Bupyeong, South Korea, is facing a sharp downturn in operations as concerns over impending U.S. auto tariffs escalate. The plant, a key production hub for GM’s exports to the United States, has seen speculation grow over potential workforce reductions and even a possible shutdown. While the company has denied any immediate plans to scale back, industry sources say production could be cut starting in April when the 25% tariffs are set to take effect.
South Korea’s GM operations had managed to stay afloat after the closure of its Gunsan plant in 2018, repositioning itself as an export base for the U.S. market. However, with U.S. President Donald Trump pushing ahead with tariffs on imported vehicles, the automaker now faces renewed existential challenges.
Automobiles remain South Korea’s top export to the United States. According to the Korea International Trade Association (KITA), South Korea’s auto exports to the U.S. exceeded $34.7 billion in 2024, accounting for 27.1% of the country’s total exports to the United States. Of South Korea’s total auto exports, more than 49% were destined for the U.S. market last year, raising concerns that the new tariffs could deliver a significant blow to the industry.
The South Korean auto sector, once fiercely competitive with brands including Hyundai, Kia, Daewoo, Renault Samsung, and SsangYong, has consolidated into four major players: Hyundai Motor, Kia, Renault Korea, GM Korea, and KG Mobility.
The new tariffs could severely disrupt GM’s South Korean operations, which heavily depend on U.S. exports. In 2024, GM Korea produced 497,000 vehicles, with 419,000—about 84%—shipped to the U.S. The Bupyeong plant produces the Trailblazer SUV, while the Changwon plant, previously known for compact models like the Tico, manufactures the Trax Crossover. GM Korea had leveraged its well-established supplier network and skilled workforce to supply cost-effective models to the U.S. market, but this strategy now appears to be backfiring.
“If the 25% tariff is implemented, exporting these small SUVs—already operating on single-digit profit margins—will become unviable, forcing a complete overhaul of GM Korea’s business strategy,” an industry official said.
Hyundai and Kia, South Korea’s largest automakers, also face significant risks. The two brands sold a combined 1.84 million vehicles in the U.S. last year, with 1.02 million units produced in South Korea and another 150,000 in Mexico—accounting for 64% of their total U.S. sales. The impact is expected to be particularly severe for high-margin models such as Hyundai’s luxury Genesis lineup, which is primarily manufactured in South Korea.
Hyundai is exploring alternative markets for its Mexico-produced vehicles, but shifting exports is complicated by varying safety regulations across different countries, making a short-term solution difficult.
Renault Korea, which had planned to begin contract manufacturing electric vehicles for Polestar in the latter half of 2025 for export to the U.S., is now assessing the potential disruption caused by the tariffs. KG Mobility, which does not directly export to the U.S., is bracing for intensified competition in markets such as Australia, Hungary, and Türkiye as global automakers seek alternative export destinations.
In response, automakers are ramping up efforts to mitigate the impact. Hyundai Motor Group has announced plans to expand production capacity at its newly inaugurated Hyundai Motor Group Metaplant America (HMGMA) by an additional 200,000 units. The company also signed a memorandum of understanding with GM last September to explore joint ventures that could help navigate tariff challenges. One strategy under consideration involves exporting semi-assembled electric commercial vehicles and SUVs from South Korea to the U.S., where GM would complete final assembly.
