By on January 17, 2017

Hyundai Tucson, Image: Hyundai

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]

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28 Comments on “Hyundai, Kia Promise $3.1 Billion U.S. Investment, Hope to Placate Trump and SUV Lovers...”


  • avatar
    Clueless Economist

    Would have been a good time to announce the approval of the Santa Cruz.

  • avatar
    Chocolatedeath

    Were they not going to do this anyway?

  • avatar
    dwford

    Hyundai is supposed to add the Santa Cruz, a subcompact crossover, redo the 5 passenger Santa Fe, enlarge the 7 passenger Santa Fe, and add Genesis crossovers all in the next few years.

  • avatar
    mtmmo

    Thank you President Trump. You’ve done more for American workers pre-office than the previous two President’s combined. I look forward to the continued strangulation of Mexico the economic leech that it is. Naturally many of my fellow anti-American Democrats will be triggered as a result. Just 3 Days to go! MAGA!

    • 0 avatar

      Winning!

    • 0 avatar
      Arthur Dailey

      That’s strange as under Obama the American unemployment rate fell from “10.0% in October 2009 to last month’s (preliminary) 4.7%.”
      http://www.investopedia.com/news/obamas-economic-legacy-8-charts/

      • 0 avatar
        Jack Baruth

        Amazing what happens when you just stop counting people who haven’t been able to find work for a year! IT’S MAGIC

      • 0 avatar
        dwford

        Yes, the unemployment rate has dropped, but it does not count those who have given up looking. Look at the labor force participation rate and the percentage of working age males that are employed – both are still have not recovered. It’s not necessarily Obama’s fault, but it is who Trump is speaking to.

        https://www.google.com/imgres?imgurl=http://static1.businessinsider.com/image/584179b9e02ba75c658b61f6-1200&imgrefurl=http://www.businessinsider.com/labor-force-participation-rate-november-2016-2016-12&h=900&w=1200&tbnid=Jo2cE6ZNTvZTJM:&vet=1&tbnh=158&tbnw=211&docid=aI_4-Um7EZPJXM&client=safari&usg=__33612woEBVZnAlyUqk6cWHUoQ8Q=&sa=X&ved=0ahUKEwjD6f-Z08nRAhVS5GMKHfaLDYUQ9QEIIDAA

        http://www.npr.org/2016/09/06/492849471/an-economic-mystery-why-are-men-leaving-the-workforce

        • 0 avatar

          If you use labor hours rather than job slots (which treat coal-miners and part-time pizza delivery boys alike) there have been no new units of employment at all.

          If you go all the way back to the spring of 2000, labor hours are up less than 1%.

          We haven’t gained anything this entire new century.

      • 0 avatar
        slavuta

        95 millions simply don’t work. And democrats want to build a welfare state where gov tax you heavy and decide who gets what

      • 0 avatar
        don1967

        @ Arthur – Lots of good things happen when you start measuring from the bottom of a major recession.

        A turnip could have compiled the same “legacy” from 2009 to 2017. Or maybe even better. Most economists agree that this has been one of the weakest recoveries ever.

    • 0 avatar
      319583076

      President’s what?

    • 0 avatar
      schmitt trigger

      “I look forward to the continued strangulation of Mexico the economic leech that it is.”

      Why THE HATE against Mexico?
      I understand that people are happy that investment is coming back to the USA, but why these openly hateful remarks?
      Do you really DESIRE a leftist Revolution in Mexico, and the foreign relations nightmare that it would become?

  • avatar
    LeMansteve

    My thoughts on all of these recent press releases announcing large US investments:

    1. They were most likely being planned well before the election, maybe even before Trump announced his intention to run for President.
    2. They are great PR on any day of the year, regardless of who is sitting in the Oval Office…
    2.1 …especially during the week of an inauguration.
    3. In light of the proposed tariff, anyone making a large investment in the US would be remiss not to point out which side of the President-Elect’s tariff they are on. They are “placating Trump” by coincidence.

  • avatar
    Chocolatedeath

    So let me get this straight….we didnt stop counting people not looking for work until 8 years ago….just wondering.

    Just would like to verify before some else considers me Anti American..

  • avatar
    SCE to AUX

    One important reason auto mfrs produce vehicles in the US is the high cost of shipping them from elsewhere. The transplants aren’t in the US just for fun.

    So Hyundai can throw a bone to Mr Trump, but they’re investing in the US because their US market share is stagnant, and it doesn’t always make sense to import heavy cars.

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