Hyundai and its sister company Kia are the latest to commit to increasing investment in vehicle manufacturing in the United States in the wake of threats from President-elect Donald Trump of new tariffs on vehicles and components imported into the country.
The Korean automakers on Tuesday confirmed they will invest $3.1 billion in the U.S. over the next five years, up from the $2.1 billion they spent over the previous five-year period. They said most of the investment will go into upgrading existing plants as well as R&D spending but that there was also the opportunity for a new plant for high-margin vehicles.
“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,” Hyundai Motor President Jin-haeng Chung told reporters during a conference in Seoul, Bloomberg reports. “We will actively consider introducing new models that have increasing demand and profits.”
2018 Genesis G80 Sport
He mentioned a U.S.-specific SUV and a Genesis model as two high-margin vehicles that are under consideration for production in the U.S. Genesis has confirmed plans to add two SUVs to its lineup by 2020 so it’s possible the two models mentioned by Chung are related.
Hyundai has a plant in Montgomery, Alabama that’s responsible for the Santa Fe, Sonata and Elantra, while Kia has a plant in West Point, Georgia responsible for the Optima and Sorento. Both plants are at capacity and were already planned to receive upgrades prior to the election.
Fiat Chrysler Automobiles [NYSE:FCAU], Ford Motor Company [NYSE:F], General Motors Company [NYSE:GM] and Toyota have all made major announcements regarding U.S. production in recent weeks. The most recent was GM which said it will invest an additional $1 billion in U.S. production on top of the $2.9 billion it announced in 2016. In a statement, GM said the investment covers multiple new vehicle, advanced technology and component projects, and will result in 1,500 new and retained jobs.