WEBVTT - Hyundai Motor President/Co-CEO Jose Munoz Talks Auto Tariffs

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Joining us is someone who has to chart the course

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<v Speaker 2>amid a dynamic let's say, dynamic trade landscape. Hondai Motor

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<v Speaker 2>CEO Jose Munios joins us here on set. Great to

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<v Speaker 2>have you here. I know you're here for the New

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<v Speaker 2>York Auto Show, so really appreciate you dropping by seven

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<v Speaker 2>thirty one. Les, talk to me first about your cars.

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<v Speaker 2>Very popular in the US. Your business has grown tremendously.

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<v Speaker 2>You have Hyundai, you have Kia, you have Genesis, which

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<v Speaker 2>Katie I do bought one of, and you produce a

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<v Speaker 2>lot more cars than people would expect here in the

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<v Speaker 2>United States.

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<v Speaker 3>Yeah, you're right, So thank you much for having me

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<v Speaker 3>so with supplaicit being that we do so, you're absolutely right.

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<v Speaker 3>So we are now the third largest oem A globally.

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<v Speaker 3>And then definitely it is not new, but for the

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<v Speaker 3>last six years or so, we have come to the

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<v Speaker 3>conclusion that the USA is the most important market for

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<v Speaker 3>US globally and it's meant to continue to do so.

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<v Speaker 3>So today we have factories in Alabama and in Georgia,

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<v Speaker 3>and just three weeks ago we open a brand new

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<v Speaker 3>factory in Savannah, Georgia to increase production by another five

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<v Speaker 3>hundred thousand cars, so we produce about forty percent of

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<v Speaker 3>the car that we sell in America here in America.

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<v Speaker 3>And then we are with these five hundred thousand more cars,

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<v Speaker 3>we're going to get to one point two million cars produced.

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<v Speaker 3>This is a big undertaking.

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<v Speaker 1>I do have one minor correction. I actually lease my Genesis.

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<v Speaker 1>I didn't buy it, and okay, I kind of wish

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<v Speaker 1>I had, because I'm worried about car prices rising, and

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<v Speaker 1>you did promise that you wouldn't raise your prices through

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<v Speaker 1>June second, and I'm curious. I'm not just asking for

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<v Speaker 1>myself either, what happens after June second to that price pledge.

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<v Speaker 3>Well, first and foremost, you know, as mentioned, we are

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<v Speaker 3>very committed to this market. We announced just three weeks

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<v Speaker 3>ago in the White House with our executive chair, Mister

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<v Speaker 3>cho our big commitment to America with a twenty one

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<v Speaker 3>billion dollar investment in this country in the next five years.

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<v Speaker 3>So this means that we're going to increase capacity up

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<v Speaker 3>to one point two million cars, but we are also

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<v Speaker 3>going to increase everything that has to do with the

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<v Speaker 3>supply chain to be able to produce those cars, including

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<v Speaker 3>green and steel. So we're building a six billion a

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<v Speaker 3>state of the art green steel factory. We call it

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<v Speaker 3>the Electric ARCT Furness in Louisiana. And in addition to that,

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<v Speaker 3>we are investing in new technologies like Boston Dynamics, bringing

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<v Speaker 3>more chips to America with Nvidia, also in autonomous viving,

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<v Speaker 3>with Emotional and even with ebitols supernal here. So this

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<v Speaker 3>is really big. So thanks to those investments, we're able

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<v Speaker 3>to produce cars like Juice I'm Glad you like it.

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<v Speaker 3>DV seventy is the most popular Genesis, followed by the

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<v Speaker 3>GB eighty and it's produced here in America in our

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<v Speaker 3>plant in Alabama.

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<v Speaker 4>So, as a company that has made bigger commitments twenty

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<v Speaker 4>one billion through twenty twenty eight, this is another fourteen

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<v Speaker 4>thousand direct jobs that you reported. What do you think

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<v Speaker 4>more largely of the terror of posturing by the Trump administration.

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<v Speaker 4>Do you think some of it is actually working to

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<v Speaker 4>bring more factory jobs on shore in the United States,

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<v Speaker 4>or do you think that there's a real risk here

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<v Speaker 4>that a lot of component parts gets so expensive that

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<v Speaker 4>it dwarts a lot of buying in this country.

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<v Speaker 3>Well, in our case, we actually took the decision to

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<v Speaker 3>invest in our new Savannah plant during the first Tramp administration.

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<v Speaker 3>So you don't build a plant overnight, and you don't

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<v Speaker 3>build plants thinking on incentives. So we took this decision

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<v Speaker 3>some time ago, and then this came to fruition just

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<v Speaker 3>three weeks ago, as mentioned, and then we don't look

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<v Speaker 3>at things in the short Obviously we like free trade.

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<v Speaker 3>We think in our global business because the components come

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<v Speaker 3>from all over the world, free trade is the best

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<v Speaker 3>for our business. But our commitment is such that we

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<v Speaker 3>have to navigate through this situation. And in fact, when

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<v Speaker 3>all these tariffs and uncertainty came to life, we wanted

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<v Speaker 3>to reassure our customers that we would guarantee their prices.

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<v Speaker 3>So that's why we came up with this the Handai

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<v Speaker 3>Customer Assurance Program to ensure we will not increase prices

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<v Speaker 3>during this period. Then after that we will evaluate the situation,

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<v Speaker 3>but we will always focus on bringing the best product

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<v Speaker 3>to the market with the highest safety rates. We're number

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<v Speaker 3>one in America in terms of top safety Pick Plus,

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<v Speaker 3>and then with the best quality and good features. And

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<v Speaker 3>you have to always be competitive regardless of tariffs.

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<v Speaker 2>Can I ask about the rest of your supply for

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<v Speaker 2>the US market? I think about forty percent you make

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<v Speaker 2>in the US, right, I'm pretty sure that you produce

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<v Speaker 2>cars in Mexico for the rest of the world. And

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<v Speaker 2>then we get a lot of South Korean imports from

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<v Speaker 2>Hondaikia and Genesis. Is that? Am I doing the math correctly?

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<v Speaker 2>And then how does that Korean supply look? Are you

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<v Speaker 2>talking to the White House? Are you talking to South

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<v Speaker 2>Korea about getting carve outs?

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<v Speaker 3>Well, in our case, in the case of Handaid Motor Company,

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<v Speaker 3>we produce in the US. We don't produce in Mexico.

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<v Speaker 3>Really maybe very minor, but we took a concert decision

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<v Speaker 3>to invest here in the USA. The other the rest

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<v Speaker 3>of the production comes mainly from South Korea. Well, we

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<v Speaker 3>are part of the ALIAS for Automotive Innovation. John Bosella,

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<v Speaker 3>the President is representing the industry and it's conveying to

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<v Speaker 3>the government the needs that we have in the industry,

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<v Speaker 3>which are pretty much common across the board. And then

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<v Speaker 3>we know that there are some discussions between the South

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<v Speaker 3>Korean government and the White House. We are not actively

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<v Speaker 3>part of that discussion. And then obviously I cannot reveal

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<v Speaker 3>what they talk about. But definitely we all want to

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<v Speaker 3>ensure that there is a a plain level field for

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<v Speaker 3>everybody so that we can compete in good terms in

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<v Speaker 3>the market, and we want to be competitive. I maintain

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<v Speaker 3>this message for the consumer. We will be competitive and

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<v Speaker 3>then the market will decide, depending on the supply and demand,

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<v Speaker 3>if there's going to be some price increase or not.

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<v Speaker 3>But again, we need to be competitive, right, So that's.

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<v Speaker 1>What I was wondering. I mean, what does competitive mean?

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<v Speaker 1>Does that mean you're eating the costs to keep your

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<v Speaker 1>market share, you know, keeping your costs that consumers pay,

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<v Speaker 1>car buyers pay, and willing to take the head or

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<v Speaker 1>you know, how does that dynamic work?

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<v Speaker 3>That dynamic is not different to the way it's being

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<v Speaker 3>done over the last thirty years or so. It's simply

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<v Speaker 3>in the short term and an additional burden to manage

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<v Speaker 3>given all the implications of the of the supply. Again,

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<v Speaker 3>our job is to focus on what we can control.

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<v Speaker 3>The cause is something we can control. How we responding

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<v Speaker 3>to the increase in tariffs, localizing investing mode in the

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<v Speaker 3>country so that we don't get to be hit by tarifts.

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<v Speaker 3>That's a simple solution and then on the revenue side,

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<v Speaker 3>we'll have to see how the market reacts. If we

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<v Speaker 3>have the opportunity to take maybe some reducing centives, increased

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<v Speaker 3>price here there, we will do. But you're not going

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<v Speaker 3>to see like a huge increase all of a sudden,

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<v Speaker 3>or we are not planning to remove cards from the

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<v Speaker 3>portfolio simply because of the tariffs, et cetera. Again, the

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<v Speaker 3>most important is a good product, safe product, good quality,

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<v Speaker 3>good features, and be competitive in the market. And then

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<v Speaker 3>the rest is our job to try to optimize localizations.

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<v Speaker 4>Honda I coo amazing coverage here because of course certainly

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<v Speaker 4>very dynamic let's call it time in of sheriffs, and

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<v Speaker 4>also the time for the New York Auto Show. I

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<v Speaker 4>grew up going there every year of my life, so

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<v Speaker 4>looking forward to seeing you there