By In-Soo Nam
SEOUL-- Hyundai Motor Co. said Tuesday it would invest up to $3.1 billion in its existing U.S. manufacturing facilities and was considering building a new plant there, joining other auto makers in highlighting investment plans after President-elect Donald Trump criticized the industry .
The South Korean automotive group, which includes affiliate Kia Motors Corp., said its investment and factory plans would help create thousands of new jobs, but didn't elaborate. It aims to spend the money over the next five years on research and development of new technologies such as autonomous vehicles and on upgrading existing facilities.
"The U.S. market is crucial to our success as a global auto maker. We will continue to expand our presence in the key market. Our investment will also help the U.S. efforts to create more jobs," Hyundai Motor President Chung Jin-haeng told a group of foreign reporters.
Mr. Chung said Hyundai's latest investment plan had been decided before Mr. Trump's election. It represents a nearly 50% increase from the $2.1 billion the group invested in the U.S. during the previous five years, he said.
The world's fifth-largest auto maker by sales when combined with Kia, Hyundai rarely discloses its investment plans for specific countries.
Mr. Trump recently aimed a series of social-media posts at auto makers including General Motors Co. and Toyota Motor Corp. over their plans to produce in Mexico, and has threatened higher taxes on imports ofcars from abroad.
Kia opened a 200,000-unit-a-year production line in Mexico last year, saying it would double the capacity by the end of 2018. Hyundai doesn't have a plant in Mexico, but plans to start some production at Kia's factory there this year.
However, Mr. Chung said the group was flexible on its strategy in Mexico, adding that plans to eventually raise Kia's annual capacity there to 400,000 units were subject to change, depending on the market situation.
Ford Motor Co. said earlier this month that it scrapped plans for a factory in Mexico. GM this week is set to unveil plans to invest at least $1 billion across several U.S. factories, while Toyota has intensified efforts to highlight its contribution to the U.S. economy.
Also, Fiat Chrysler Automobiles NV has said it would invest $1 billion in two existing plants in the U.S., creating what it says will be 2,000 new jobs.
Hyundai and Kia are bracing for another challenging year after missing their sales targets for a second straight year on lackluster performances in China, the U.S. and other major markets in 2016.
At home, Hyundai's sales were hurt by a workers' strike that led to billions of dollars in lost production, while a change in consumer preferences from sedans--Hyundai's traditional strength--to SUVs has hurt the company's sales volumes and profitability.
Mr. Chung said Tuesday that Hyundai was considering a new U.S. factory to meet demand for high-margin models such as a U.S.-specific sport-utility vehicle and the Genesis premium sedan. For now, Hyundai exports two types of the luxury model built at its Korean plants for sale in the U.S.
Hyundai currently has a factory in Montgomery, Ala., producing the Sonata and Elantra sedans and the Santa Fe crossover vehicle. Kia's factory in Georgia makes the Optima sedan and the Sorento SUV.
Write to In-Soo Nam at email@example.com
(END) Dow Jones Newswires
January 17, 2017 06:29 ET (11:29 GMT)
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