By Kwanwoo Jun

Hyundai Motor's shares advanced for a third consecutive session as hopes grow that the carmaker will be a major beneficiary of the trade deal struck between Seoul and Washington earlier this week to lower U.S. tariffs on Korean autos and many other goods.

The South Korean auto giant's stock closed 9.4% higher--its sharpest daily percentage gain in more than a year--outperforming the benchmark Kospi's 0.5% rise.

The stock's rally began on Wednesday as U.S. and South Korean negotiators wrapped up months of intense talks, agreeing on the terms of the deal. Seoul will invest $350 billion in the U.S.--including $200 billion of cash installments, capped at $20 billion annually to minimize financial-market risks. In return, the Trump administration will lower tariffs on a swath of items, including vehicles, to 15% from 25%.

The lower U.S. duty is welcome news for Hyundai, which has been subject to a 25% levy since April due to the protracted negotiations. The deal would bring its tariff on par with those faced by its Japanese and European rivals.

Nomura estimated that the reduced auto tariff would boost Hyundai's fourth-quarter operating profit by 9% from the prior quarter. Increased local production of vehicles in the U.S. and lower duties will help lift the carmaker's annual operating profit by 13% in 2026, analysts Angela Hong and Won Kang said in a report.

The tariff relief should alleviate market concerns about competition in the U.S., as Korean original equipment manufacturers "are now able to compete on an equal footing with Japanese and European peers," HSBC analyst Will Cho wrote in a note.

HSBC raised its 2025-2027 operating profit forecasts for Hyundai by 10%-14%, citing the lower tariffs and other efforts to improve profit margins in the U.S.

Hyundai on Thursday reported weaker third-quarter earnings, partly due to U.S. tariffs, with net profit and operating profit falling 21% and 29%, respectively, from a year earlier.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

October 31, 2025 03:02 ET (07:02 GMT)

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