Announcing investment plans for the United States appears to be the latest trend by automakers with Hyundai Motor Group being the latest announcing plans for $3.1 billion, including a new plant, to be spent in the U.S. during the next five years.
The South Korean company’s move, which represents a 50% increase in the money it drives into the U.S., comes just hours after General Motors outlined $1 billion in new investment in the U.S. expecting to develop as many as 2,000 new jobs.
President-elect Donald Trump has been using Twitter to put automakers – and other countries – on notice that if they don’t start building more vehicles in the U.S., he plans to slap their imported vehicles with a 35% tariff.
Much like GM’s new efforts, Hyundai’s plans, especially the new plant, aren’t exactly new, but are designed to serve as a reminder to the incoming administration that they invest a lot of capital in the United States.
(GM reveals $1B in new U.S. investment, including 2,000 jobs. For more, Click Here.)
Recently expelled Hyundai America CEO David Zuchowski told TheDetroitBureau.com last year Hyundai needed more production capacity in North America and that would likely come from a new U.S.-based plant, unlike its cousin, Kia Motor, which planned a new facility in Mexico.
In recent weeks, Ford, Fiat Chrysler and Toyota have also announced U.S. investment plans after being targeted by Trump. He also took aim at BMW last week, which basically responded with a statement saying it produces many vehicles in the U.S. and has no plans to alter its investment or production strategies at this time.
Also, like GM executives, Hyundai’s Chung Jin-haeng, president of the group, denied the plan was due to pressure from Trump, adding that a new U.S. factory would depend on whether demand improved under the next U.S. administration.
“We have to be committed to the U.S. market – a strategically important market which can make or break our global success,” he said Tuesday, according to Reuters.
(Trump threatens Canada, Mexico, with new border tariffs. Click Here for the story.)
The South Korean group plans to spend the $3.1 billion to retool existing factories in the Montgomery, Alabama, and West Point, Georgia, and bolster its research on self-driving cars, artificial intelligence and other technologies, Chung said.
Essentially confirming Zuchowski’s earlier statement, Chung said the group is considering a new U.S. factory to build high-margin, high-demand models such as a U.S.-specific sport utility vehicle and a Genesis premium vehicle.
He didn’t say that the “high-margin, high-demand” model would be pickup truck, but the maker’s been dancing around that hole in its model line-up for years. In fact, last year at the Chicago Auto Show it unveiled an updated Santa Cruz concept that many believe is destined for dealer showrooms in the near future.
(To see why Hyundai missed its global sales target last year, Click Here.)
The automaker has said it has something new coming to the Chicago show once again, but declined to confirm if that was a production-ready Santa Cruz or some other form of truck that company could use in its portfolio.