Hyundai-Kia To Expand In Mexico
Hyundai-Kia will end an unofficial cap on NAFTA-area expansion with a new factory in Monterrey, Mexico.
Reuters is reporting via sources that the new plant will have an annual capacity of 300,000 units, and will build small cars. Hyundai and Kia plants in the United States are running at flat out, and the lack of extra capacity has long been blamed for the inability of both brands to capture more market share in the United States.
While no official announcement has been made, the Mexican plant would allow for more North American capacity, while allowing for less profitable small cars to be made in a jurisdiction with lower labor costs. At the same time, South Korean production is looking less stable, due to labor disputes, a rising currency and higher labor costs. Japanese rivals like Honda and Mazda have already established Mexican production facilities to build similar vehicles.
More by Derek Kreindler
Comments
Join the conversation
Wonder if this means that small cars will now be sold under the Hyundai name in Mexico instead of or in addition to the Dodge name?
This isn't exactly an ideal location for safety's sake. I wonder if they're trying to keep their logistics footprint localized to West Point, GA. Terrible location if they want to leverage their US man power.
So does anyone here know how much it costs to assemble a car? I suppose this is just Final assembly costs that are saved (?) At the low end of the market, I suppose a (say) $500 cost could be passed right on to lowering the sticker price which could make a big difference to low-end new car buyers. But it would be nice to know how much it costs to say build a Fusion in MI vs one in Ole Mexico (just sayin)
I read year ago that 2 automakers were serious about investing in MExico - BMW and Hyundai ad now 1 after BMW announced NA plant - small BMW´s and Mini´s to produce and now Kia probably will in next weeks annnounce this MExico plant. Last months there were informations about Hyundai considering their 3rd plant in NA - either USA or Mexico i was sure Mexico , i mean USA has no advantage, MExico has cheaper labour, more FTA´s - Latin America and Europe. But what surprised me about this news is that it should be KIA plant not Hyundai - i mean it´s not important, because most likely they will produce their cars from both brands anyway, but Hyundai will start MExico operations this summer, they split with Chrysler, but their small cars i10 and 2 more are sold in MExico for years - 1st with Dodge badge, now 2-3 years with Hyundai badge, while Kia has no present in Mexico at all. They could beginn their sales operations there soon, but it´s odd to have plant in coutry where your own cars are not avalaible. Also i wouldn´t be surprised if Hyundai will announce their Mexico plant too - so they would have 2 plants in Mexico