Hyundai plans $3.1B investment in U.S. plants, research

It's not just Detroit automakers that are feeling pressure from President-elect Donald Trump to boost their automotive operations in the U.S.

Now Hyundai Motor Group says it's going to beef up its U.S. factories and operations, spending $3.1 billion by 2021. The South Korean automaker made the announcement in South Korea, where it is is based, in a move that may have been intended to head off any additional broadsides from Trump, who has already chastised General Motors, Ford Motor and Toyota, among others, about plans to expand factories abroad, especially Mexico, and import vehicles to the U.S.

Hyundai Motor Group, which includes the Hyundai and Kia brands in the U.S., will spend its billions on research and development, its president, Chung Jin Haeng, told reporters in Seoul this week. The investment will also go to augment its Hyundai and Kia factories in Alabama and Georgia.

If demand rises in the U.S., the group will consider building a new plant in the U.S., he says. The Hyundai brand sold 775,005 new vehicles in the U.S. last year, up 1.7%, compared to an overall rise in U.S. auto sales of 3.1%, Autodata reports. Kia fared better, selling 647,598 new cars and SUVs, up 3.5%.

Hyundai Group's sales have been hampered by not having as full of a range of crossovers and other trucks, such as pickups, as competing brands, both import and domestic. But the company still intends to plow ahead with expansion. The added investment would mark a 50% gain compared to the $2.1 billion Hyundai Group sunk into U.S. operations over the past four years, Haeng said.

Trump has singled out the auto industry when it comes to adding jobs to the U.S. in a series of Twitter messages, including threats of a 35% tariff on imported vehicles.

Ford Motor, which received its share of grief from Trump tweets during the campaign, announced this month it is canceling plans to build a new $1.6 billion plant in Mexico.

Also this month, Trump went after Toyota, which is building a $1 billion plant to make Corolla sedans near Guanajuato in central Mexico. In a tweet, Trump said "NO WAY!" to the plans for south of the border. "Build plant in U.S. or pay big border tax."

Toyota responded by saying "it has been part of the cultural fabric in the U.S. for 60 years" and builds many of its vehicles in America.

Contributing: The Associated Press

USA TODAY


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