Hyundai Motor Group’s premium brand Genesis’ upgraded GV70 is displayed at the LA Motor Show held at the LA Convention Center on Thursday. (Hyundai Motor Group)

The US sales expansion of Hyundai Motor Company’s luxury brand, Genesis, may face setbacks with President-elect Donald Trump’s proposed tariff hikes, according to industry sources Friday.

The incoming Trump administration, set to begin its term on Jan. 20 next year, reportedly plans to implement up to 20 percent tariffs on most goods from other countries in line with its campaign pledges.

Currently, Genesis exports most of its vehicles manufactured in Korea to the US. Hyundai Motor’s car manufacturing plant in Alabama only produces an all-electric version of the GV70 SUV. The proposed tariffs could result in price increases for these high-end vehicles, potentially weakening their competitive pricing in the all-important market.

This situation suggests that Genesis might need to start producing other lineups within the US.

During the Los Angeles Auto Show, which began Friday, the automaker said it secured additional sales locations in Washington, Minnesota, New York and Florida, bringing its US-based sites to a total of 60. However, the company did not disclose strategies for boosting its US production volume.

Hyundai Motor declined to comment, citing the sensitivity of the matter, but stated it is working to produce other Genesis models at its newly built plant in the state of Georgia.

Nevertheless, industry watchers say it could be challenging to transfer the current Genesis production volume from Hyundai's Ulsan plant in Korea to the US due to possible backlash from domestic labor unions. According to the company’s collective agreement, any transfer of vehicle production that could impact domestic employment must be reviewed by a joint labor-management committee.

Kim Pil-su, a car engineering professor at Daelim University, noted, “Hyundai’s labor unions are hardliners. They would want to retain around 70,000 units of Genesis’ annual US sales. Hyundai Motor should aim to expand production within the US while maintaining its current Korean-manufactured Genesis volume. But this could also be complicated, with the second Trump administration’s move to repeal EV subsidies outlined in the Inflation Reduction Act.”

Since its US debut in 2016, Genesis cars have sold over 300,000 units in the region as of October.

By Byun Hye-jin (hyejin2@heraldcorp.com)