Middle East turmoil threatens Hyundai Motor, KGM

Hyundai Motor Group and KGM are feared to bear the brunt of the escalating geopolitical tensions in the Middle East, as mounting external uncertainty is expected to raise logistics costs and dampen market demand there for the export-reliant carmakers. The joint U.S.-Israel attack on Iran has rapidly driven up global oil prices, which in turn is increasing shipping costs for carmakers. Hyundai Motor, Kia and KGM are three representative domestic carmakers that generate a significant portion of their earnings from exports, making them highly vulnerable to such external shocks. KGM particularly remains vigilant over the growing uncertainty in the Middle East, as its exports to the territory accounted for roughly 25 percent of its total last year. The company formerly named SsangYong Motor is accelerating efforts to normalize its earnings by focusing on exports to the Middle East, after undergoing corporate restructuring. Rising freight rates are also expected to push up overall operating costs for the carmakers at a time when they have to tackle other risk factors. For instance, Hyundai MotWeiter zum vollständigen Artikel bei Korea Times Weiter zum vollständigen Artikel bei Korea Times