SEOUL (Reuters) – South Korea’s Hyundai Motor ( OTC: ) on Thursday expected its 2025 sales growth to be cut in half due to softening vehicle demand and increased competition after reporting a 17% decline in fourth quarter earnings.

Hyundai, which along with subsidiary Kia is the world’s third-largest automaker by sales, estimates that revenue in 2025 will grow 3.0% to 4.0% this year, compared to 7.7% last year. It expects its operating margin to be 7.0% to 8.0%, up from 8.1% in 2024.

“Business uncertainties are increasing this year,” Hyundai said, citing a slowdown in major markets, slowing demand for electric vehicles and macroeconomic volatility.

Global automakers are bracing for policy uncertainty in the US, the world’s second-largest auto market, which threatens to slow demand, as US President Donald Trump said this week that he could impose 25% import tariffs on Canada and Mexico from February 1.

Trump also said he would consider eliminating tax credits for the purchase of electric vehicles.

North America and South Korea are the two biggest markets for Hyundai and Kia.

Hyundai reported an operating profit of 2.8 trillion won ($1.95 billion) for October-December as it spent more on promotions in a sluggish car market.

The result was lower than the 3.2 trillion won average of 24 analyst estimates compiled by LSEG SmartEstimate, which is weighted toward estimates from analysts that are more often accurate.

Hyundai shares rose 1.4% after the earnings announcement.

During the quarter, Hyundai’s global retail sales declined as solid sales in the United States and India were offset by slower demand in South Korea, Europe and China.

The weaker local currency against the US dollar helped boost Hyundai’s return on equity but also increased foreign debt and related financial costs, weighing on profits, analysts said.

($1 = 1,436.4200 won)