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The Hyundai concept pickup truck

Trouble appears to be brewing for Hyundai Motor Company’s plans to expand into the US pickup truck market. The US has stated that it means to maintain the current tariff rate on pickup trucks in its negotiations to revise the South Korea-US Free Trade Agreement (KORUS FTA). The bilateral negotiations haven’t even gotten underway, but South Korean companies are already feeling the heat.

During a recent visit to the US, Democratic Party lawmaker Song Young-gil was told by US Commerce Secretary Wilbur Ross that the US means to keep tariffs on pickup truck imports at their current level instead of starting to reduce them in 2022. According to the KORUS FTA, the tariff of 25% that is currently imposed on pickups exported to the US will be gradually lowered starting in 2022. But the US suggested that it would treat the revision of the agreement as an excuse to leave the current tariffs in place instead of implementing the agreement as it currently stands.

The US is the only country in the world where pickup trucks are performing strongly. They’re a popular choice with American consumers, accounting for 15% of annual vehicle sales. Despite their large frame and their high fuel consumption, pickup trucks (as well as SUVs) have enjoyed increasing demand in the US market, backed by low oil prices.

Some of the most popular pickup trucks in the US are Ford’s large F-Series and the Chevrolet Colorado. Japanese models like the Toyota Tacoma and the Nissan Frontier are also doing quite well. During this year’s Frankfurt Motor Show, venerable German carmaker Mercedes-Benz announced plans to enter the US pickup truck market, believing that the strong growth trend means there is money to be made.

In 2015, Hyundai also weighed the option of entering the US pickup truck market when it unveiled the Santa Cruz concept car during the 2015 Detroit Auto Show. Hyundai’s lack of a pickup truck has long been regarded as a major weakness for the company in the US market. The industry view has been that Hyundai will release a pickup truck for mass production in 2019, or even as early as next year. But Hyundai thinks that if the US – the largest market for pickup trucks – throws up barriers by keeping tariffs high, there’s no point in entering the market. A company spokesperson said that no decisions have been made yet but added that “we’ll have little choice if the US takes steps to defend its industry in a market where US cars already have an overwhelming advantage.”

Ssangyong Motor is the only South Korean automaker that makes pickup trucks. The company has exported the Korando Sports vehicle to Central and South America and to Europe and was considering the option of expanding into the US market as well, but that plan has been put on hold by recent considerations.

By Hong Dae-sun, staff reporter

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