Hyundai expects to invest in its plant in Montgomery, Alabama, as part of a $3.1 billion, five-year plan.
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.
Hyundai won raves for the Santa Cruz concept, a car-based pickup, which it could use in its U.S. line-up.
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.
Let’s compare what Obama’s done as president for 8 years to what Trump’s done in 8 weeks as president-elect.
Alienate many of our key allies? Reverse his 2014 on-record position that Russia is our single worst foe? Launch his cabinet with an assortment of folks facing ethical issues?
As to Obama:
* Ran with the bailout, saving GM, Chrysler and 1 million U.S. jobs. And, according to most economists, thus prevented the Great Recession from becoming the next Great Depression;
* Under Obama, automakers have experienced the longest sales recovery in US automotive history, including three consecutive years of record sales, the last two over 17 mil;
* Fuel economy has soared, even as gas has been averaging between $2-2.50 a gallon for much of his second term. (Recall how some of the GOP candidates ran under the theme of $2 gas in 2012?);
* While enforcing emissions and safety regs, Obama appointed what automakers routinely tell me is the best NHTSA chief ever, Rosekind shifting gears from the stick to the carrot-and-stick, creating the first-ever industry/govt consortium aimed at pushing new tech, ie forward collision warning, into wide use without regulations;
* Similarly, industry leaders credit NHTSA for not only NOT hindering the developing of autonomous vehicles but encouraging the industry to work faster on the technology;
* Despite some claims during the election, the number of auto jobs in the U.S. under Obama grew by at least 45k; GM alone counted 25,000 prior to this week’s announcement. And, if you know ANYthing about the auto industry, you know plant and product plans are made anywhere from 12-48 months ahead of when they are announced. The Ford, GM and FCA announcements all were openly discussed in 2016, some even in 2015.
Shall I continue? These are pretty significant targets to match.