Hyundai Redirects Mexican Tucson Exports to Canada

Hyundai has shifted exports of its Mexico-produced Tucson SUVs to Canada following new US tariffs that increase costs for vehicles, parts, and raw materials imported from outside the country.

While the export change affects only about 16,000 units assembled in Mexico last year, it reflects the company’s broader strategy of adapting to shifting trade policies, reports MBN. In March, Hyundai announced a US$21 billion investment in US operations through 2028, including expanded capacity at its Georgia and Alabama plants, which is expected to create 14,000 direct jobs.

The South Korean automaker produces the Tucson, one of its best-selling models globally, in Monterrey. The tariff framework, introduced in April 2025, imposes duties of 25% on vehicles and parts with non-US content and 50% on steel and aluminum. At the time, Marcelo Ebrard, Mexico’s Minister of Economy, confirmed the company’s decision to redirect the Tucson production to countries with which Mexico maintains free trade agreements. 

“One effect [of the tariff imposition] was that we had to find other market options for those SUVs that were mainly destined for the United States,” says Edgar Carranza, COO, Hyundai Mexico, to MBN.

Hyundai has managed to maintain its price competitiveness in Mexico, where the market has continued to grow despite signs of a slowdown this year, according to Carranza. While it has not faced significant negative impacts, investment and growth opportunities remain on hold. The company intends to resume its expansion plans once market conditions become clearer.

The tariff measures are reshaping Mexico’s entire automotive sector. During the first five months of 2025, light vehicle exports declined 6.3% and overall vehicle output fell 5% year-over-year, according to industry data. Heavy-duty vehicle production dropped nearly 20% as manufacturers absorbed rising input costs. While 92% of auto parts made in Mexico still comply with USMCA thresholds, complex supply chains mean even qualifying products may be subject to tariffs if US content is not maximized, reports MBN.

Other automakers are also adjusting. Stellantis suspended production at its Windsor plant in Canada due to tariff-related cost pressures, with potential knock-on effects for Mexican operations. Nissan will close its CIVAC plant in Morelos by the end of fiscal year 2025, transferring output to Aguascalientes, its largest Latin American facility. General Motors is relocating some production to the United States, supported by a US$4 billion investment in electric and gasoline vehicles.