Hyundai Motor to boost US investments to US$3.1bil

SEOUL: The Hyundai Motor Group said it plans to boost US investments by 50% to US$3.1bil over five years and may build a new US factory – the latest auto firm to announce fresh investment after threats from President-elect Donald Trump to tax imports.

Trump has threatened to slap a 35% tax on vehicles imported from Mexico, criticising foreign automakers from BMW to Toyota Motor Corp for building vehicles in Mexico for the US market.

Chung Jin-haeng, president of the group, which encompasses Hyundai Motor Co and Kia Motors Corp, denied that the plan was driven by pressure from Trump but said the group hopes for improved demand for cars under the new US president as he has pledged to create jobs.

“We have to be committed to the US market – a strategically important market which can make or break our global success,” he told reporters here.

The South Korean group plans to spend the US$3.1bil to retool existing factories in the United States and boost research on self-driving cars, artificial intelligence and other future technologies, Chung said.

He also said the group is considering a new US factory to build high-margin, high-demand models such as a US-specific sport utility vehicle and a Genesis premium vehicle.

“We are studying the plan diligently,” he said, adding that whether or not to build a new plant will depend on demand. Hyundai has a factory in Montgomery, Alabama, while Kia runs a factory in Georgia. Kia started production at its first Mexico factory in May last year, saying it plans to boost its production capacity to 400,000 vehicles a year.

Chung said Hyundai Motor, which does not have a Mexico factory, will start production at Kia’s Mexico factory this year as previously planned.

But he said he is “agonizing” over the Mexico factory, adding that the planned annual capacity of 400,000 is subject to change.

Toyota, Ford Motor Co and Fiat Chrysler Automobiles have recently announced new investment in the United States.