Hyundai, Kia Promise $3.1 Billion U.S. Investment, Hope to Placate Trump and SUV Lovers

Hyundai Motor Company and its Kia affiliate are starting off the New Year with a promise to float barges full of cash to U.S. shores.

The automaker has announced a plan to funnel $3.1 billion into its American operations over the next five years, handily killing two birds with one stone. Not only would it (potentially) placate President-elect Donald Trump’s thirst for non-Mexican automotive investment, it would also fix a thorny problem facing Hyundai’s vehicle lineup.

According to Bloomberg, Hyundai Motor President Chung Jin-haeng said some of the funds might go towards a new assembly plant. Currently, Hyundai has one U.S. plant in Montgomery, Alabama, as well as a California design center and Michigan engineering facility.

“We expect a boost in the U.S. economy and increased demand for various models as President-elect Trump follows through on his promise to create one million jobs in five years,” Chung said at a Seoul press conference this morning. “We will actively consider introducing new models that have increasing demand and profits.”

Profits come over politicians for any automaker, but it’s nice to take the political heat off while raking it in. Don’t forget that Hyundai expects to offload the low-profit Accent to Mexico, rather than build it in high-cost South Korea. The automaker might think that boosting U.S. investment could compensate for such a move.

Regardless of whether automakers rebuke Trump’s threats (like the Germans) or acquiesce to them (like Ford or General Motors), no one wants to run afoul of the president-elect’s proposed 35-percent tariff.

For Hyundai, building a new plant would ease production constraints and help it give Americans what they want: utility vehicles. The automaker plans to revamp its crossover lineup to stimulate sales, with at least one new model on the way. Chung said the plant would crank out upscale Genesis vehicles and a U.S.-market SUV.

Back in October, a report emerged stating Hyundai plans to move production of Genesis models to the U.S. — a move that would require an expansion of its existing Montgomery facility or the construction of a new standalone plant. Genesis expects to offer six models in the U.S. by 2020.

[Image: Hyundai]