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South Korea is collaborating with the government and private sector to strengthen its ties with the U.S. in the shipbuilding industry. Major companies, such as HD Hyundai Heavy Industries, are establishing bases in the U.S., and the government is supporting efforts to train individuals. They are taking advantage of the Trump administration’s push to revive the shipbuilding industry to gain a share of the market for building and repairing military ships. South Korea aims to catch up with China, which holds over half of the global shipbuilding market share, by leveraging its alliance with the US.
In late June, HD Hyundai emphasized its partnership with Edison Chouest Offshore (ECO), a U.S. shipbuilding company. The two companies plan to build LNG-fueled container ships together by 2028. ECO has five commercial shipbuilding bases in the US and specializes in offshore support vessels (OSVs); however, orders have been sluggish in recent years.
Hino Motors and Mitsubishi Fuso Truck and Bus Corporation have reached a final agreement to merge their operations in April 2026, but what will this mean? A basic agreement was initially reached in 2023, but the decision was delayed due to irregularities in Hino’s engine performance certifications. The merger will finally move forward following Hino’s settlement with U.S. authorities.
The commercial vehicle industry has undergone rapid changes over the past two years of stalled negotiations, so both companies will need to quickly demonstrate the benefits of the merger to make up for lost time. The biggest change is the tightening of environmental regulations.
In May 2024, the European Union (EU) strengthened CO₂ emission regulations for large trucks. By 2030, emissions must be reduced by 45% compared to 2019 levels. This is an increase from the previous target of 30%. By 2040, emissions must be reduced by 90%, a very strict requirement.
LG Energy Solution, a major company in South Korea, has withdrawn its investment plan for a materials factory. The company cited a slowdown in the electric vehicle (EV) market and a diminishing competitive advantage in Indonesia, where nickel is widely produced, as reasons for the decision.
Battery production involves processes from material manufacturing to productization, and the withdrawn plans included the construction of a nickel smelter for the main cathode material, as well as the production of cathode precursors and other materials.
Komatsu announced that its consolidated net income for the fiscal year ending March 2026 is expected to decrease by 30% year on year to 309 billion yen. This is lower than the market forecast of 403 billion yen. The U.S. administration’s tariff policy will have a negative impact of $650 Million USD (94.3 billion yen). The exchange rate assumption of 1 yen = 135 yen (compared with 152.8 yen in the previous fiscal year) is also a factor, as it reflects an appreciation of the yen by approximately 8 yen compared with the current market rate.
Of the 943 billion yen, 785 billion yen is attributable to increased production costs due to tariffs, and 158 billion yen is attributable to a decrease in sales volume due to reduced demand.
Japan Engine Corporation, a manufacturer of marine engines, says it has begun final testing of a new engine that uses a fuel mixture of ammonia and heavy fuel oil. The testing involves running the engine alone in a factory to confirm safety and to check for abnormal behavior. Testing is expected to be completed by September, with production planned to begin in October.
The large, low-speed marine engine developed by the company can burn up to 95% ammonia (by heat ratio) mixed with heavy fuel oil. The engine used in this trial will be installed in an ammonia carrier ship currently under development with Nippon Yusen and others. The ship is expected to be completed in fiscal 2026.
KG Motors, which manufactures and sells the ultra-compact “mibot” EV, is moving toward mass production of the units. It will start mass production in October 2025 at an assembly plant it has built near its headquarters. The company plans to produce 300 units in FY2025, 3,000 units in FY2026, and 10,000 units in FY2027.
The mibot is a one-person vehicle designed for short-distance travel, with a range of 100 kilometers per charge. The planned price at the time of mass production is 1.1 million yen ($7,700 USD), including consumption tax.
The assembly plant in Higashi Hiroshima City consists of a single production line with a main line of seven processes and a subline of four processes. Since there are only a few parts, the number of processes is less than that of a normal automobile production line.
Last month, South Korea’s Hyundai Motor Group announced that it will invest $21 billion in the U.S. over the next four years. In addition to investing $6 billion to build a steel mill in Louisiana, the company will increase its U.S. auto production capacity by 70% to 1.2 million vehicles per year at a cost of $9 billion
The $21 billion investment in the U.S. will be the largest ever made by the Hyundai Motor Group. The investment will be made between 2025 and 2028 and will cover a wide range of fields, including automobiles, steel, parts and energy.
Honda plans to launch an electric motorcycle in Vietnam this month. The suggested retail price is less than 29 million VND (about $1183) without battery. The company is targeting the younger generation, who often use motorcycles to commute to school.
The name of the motorcycle to be sold is “ICON e:”. It will be manufactured at the company’s Binh Phuoc plant in northern Vietnam and will initially be sold through authorized dealers in seven provinces and cities. The maximum speed is 48 km/h, and it takes about 8 hours to charge the battery from zero to full. The maximum distance that can be traveled on a full charge is 71 kilometers. Because it does not require a driver’s license, which can be obtained at age 18, it is expected to be used by high school students on their way to school.
South Korea is considering purchasing liquefied natural gas (LNG) and sharing the cost of stationing U.S. troops in the country as bargaining chips in negotiations with the U.S., which President Trump is seeking to revive, but these are not sufficient materials, and the future is uncertain. South Korea is the second largest shipbuilding nation after China and can produce high value-added vessels such as LNG carriers.
The numbers vary greatly from country to country. This is strongly influenced by the geopolitical and economic intentions behind them. Broadly speaking, it seems that countries with strong economic and strategic ties to China have been given a higher tax rate as a form of sanction. Cambodia, Laos, Vietnam, and Myanmar are all examples of this. On the other hand, countries where U.S. companies have a direct presence have also been given a more restrained rate from a supply chain perspective. Furthermore, from a political and security perspective, the Philippines, for example, which has close military and diplomatic ties with the United States, can be said to be relatively privileged.
