According to three sources that have knowledge of the proceeds, South Korea’s Hyundai Motor has the intention of increasing the production output capacity at its US plant, buoyed by increased demand for the SUV segment.
Hyundai Motor, the fifth largest carmaker in the world when considered together with affiliate Kia Motors, would like to capitalize on the growing demand for sport utility vehicles as the segment grows on the back of the lower gasoline prices – especially in the United States where demand for gas-guzzling vehicles has jumped through the roof once more. Additionally, the South Korean carmaker’s deliveries of passenger cars such as the best-selling Elantra and Sonato have been dwindling lately – the purchases are redirected towards the larger, albeit less fuel-efficient SUVs as gasoline prices continue to plunge.
“It’s a new assembly line right next to the current Alabama line. State of Alabama is negotiating final terms,” commented one of the persons, talking about the planned assembly facility.
The report, initially coming from South Korea’s Yonhap News Agency led to a surge in Hyundai’s shares by as much as 3.2 percent to their best intraday level in about two months on the news. Hyundai currently has the Santa Fe large sport utility vehicle produced at Kia Motors’ factories in Georgia and the smaller Tucson crossover is imported directly from South Korea. The Alabama production facility builds the Elantra compact and Sonata mid-sized sedans. Two other persons with knowledge of the automaker’s strategy corroborated the report on the new assembly line for SUV production but also said the matter had not reached a final decision yet.