The Genesis GV70 luxury SUV / Courtesy of Genesis

Experts and industry officials warned on Tuesday that Genesis could face significant setbacks due to U.S. President-elect Donald Trump's promise to impose a 10 percent tariff on all imported goods. This is a particular concern for the luxury carmaker, as it produces the majority of its vehicles in Korea.

Of particular concern is the automaker's manufacturing reliance on the home territory, unlike other arms of the Hyundai Motor Group, such as Hyundai Motor and Kia.

According to data from iM Securities, some 65 percent of Hyundai Motor cars exported to the United States in the first nine months of this year were produced in Korea. For Kia, the figure stood at 52 percent during the same period.

However, the figure for Genesis is forecast to be much higher, as all of its models, except the Electrified GV70, are built in Korea for export to the world's largest economy.

Hyundai Motor and Kia are moving to tackle the tariff risk by increasing vehicle production in the U.S., but it appears tough for Genesis to take a similar approach, as it needs a consensus among its union workers.

Under a collective agreement between the carmaker and its union, the management is capable of shifting a production base to other countries for certain models, which are already manufactured in Korea, only when it reaches an agreement with the union.

This blocks Genesis from manufacturing its existing models in any of Hyundai Motor Group's U.S. factories for the time being.

Experts said unionized workers should accept the agenda, as this is closely related to the group's future growth in the world's most strategic marketplace.

"Given the carmaker's strong earnings reliance on exports, its union is urged to comply with any possible request from the management over the agenda," said Lee Ho-geun, an automotive engineering professor at Daedeok University.

The professor emphasized that this issue should never be used as a bargaining chip at such a critical time, as the carmaker faces significant challenges under the Trump administration.

The Genesis G90 luxury sedan is on display at its exhibition hall in Seoul, Oct. 24. Yonhap

Industry officials said Korean automakers, including Genesis, will lose their price competitiveness unless they devise specific countermeasures to minimize the tariff risks.

"Under any scenarios, the carmakers will be seriously affected after the inauguration of Trump," an auto industry official said. "As prices are the most critical part in determining auto sales, Genesis and two other carmakers from Hyundai Motor Group will be under growing dilemma at a crucial time when they enjoy healthy growth in the U.S."

Genesis is cementing its premium identity in the U.S., as evidenced by its sales growth over the past few years. According to data from the carmaker, it set a new sales record of 31,821 in the first half of 2024 in the U.S. — driven by solid sales performance of its flagship luxury GV70 SUV.