This photo provided by Hyundai Motor Group shows Euisun Chung, executive chair of the group, speaking at a groundbreaking ceremony for Hyundai Motor Group Metaplant America in Savannah of the U.S. state of Georgia on Oct. 26, 2022. (Image courtesy of Yonhap)
SEOUL, March 21 (Korea Bizwire) — Hyundai Motor Group is accelerating efforts to expand its production footprint in the United States, amid U.S. President Donald Trump’s continued call for foreign companies to manufacture in the country to do business there, according to industry observers Friday.
According to the industry sources, the group plans to hold an official opening ceremony next week for Hyundai Motor Group Metaplant America (HMGMA), its electric vehicle (EV) and hybrid production facility located in Savannah, Georgia.
Although the 11.83 million-square-meter plant has been in partial operation since late last year, it will officially commence full-scale operations following the ceremony.
HMGMA currently operates under a limited capacity of 300,000 units per year, but Hyundai aims to boost it up to 500,000 units once the US$5.54 billion facility becomes fully operational.
Combined with Hyundai Motor Co.’s existing Alabama plant, with a capacity of 330,000 units, and Kia Corp.’s 350,000-unit plant, the South Korean automotive group is poised to boost its U.S.-based production capacity to around 1.18 million vehicles per year.
Last year, Hyundai and Kia sold a combined 1.7 million vehicles in the U.S., a 3.4 percent on-year increase and making the group the fourth-largest global automotive group in the U.S. market.
Next week’s HMGMA ceremony comes as global automotive groups are bracing for looming reciprocal and sectoral tariffs on their exports to the U.S., which Trump has pledged to introduce since his election campaign.
Jose Munoz, the chief executive officer (CEO) of Hyundai Motor Co., has stressed that Hyundai’s decision to invest in HMGMA was made during the first Trump administration and that its localization strategy in the U.S. market “will help mitigate the impact of any potential policy change.”
“(HMGMA) is ramping up production of the Ioniq 5 EV, which is already on sale, and it is preparing to produce the Ioniq 9 EV at the end of Q1. Preparation to add hybrid production is already underway,” Munoz, who took the helm of Hyundai Motor as the company’s first CEO in January, said at a company shareholders’ meeting on Thursday.
The White House said in a release on Thursday (U.S. time) that Hyundai Motor Group’s push to expand its U.S. production capacity was part of a “manufacturing win” for the U.S. achieved through Trump’s “America First” trade policy.
South Korean media outlets have reported that Hyundai was seeking to invite Trump to the HMGMA opening ceremony, along with key figures within the current Washington administration. The event is expected to be attended by Georgia Gov. Brian Kemp.
The South Korean auto giant is also collaborating with American companies to create synergy in its U.S. operations, as well as in the global market.
In September, Hyundai Motor and General Motors Co. (GM) formed a partnership to push for joint production of passenger and commercial vehicles, as well as development of eco-friendly energy technologies, such as electric and hydrogen.
It marked Hyundai’s first comprehensive cooperation agreement with a major foreign automaker.
“Given their high share of sales in the U.S., the cooperation between the two automakers will inevitably be focused on the U.S. market,” said Kim Gui-yeon, an automotive sector analyst at Daeshin Securities, adding the partnership serves as a factor that mitigates U.S. tariff risks for Hyundai.
Industry observers say that Hyundai and GM could announce specific projects for their collaboration next week on the occasion of the HMGMA ceremony, with speculations swirling that they could join hands in the development of vans and pickup trucks for the U.S. market.
Hyundai Steel Co., the steelmaking unit of Hyundai Motor Group, is also reviewing constructing an automotive steel mill in the U.S. to respond to Trump’s protectionist policies.
Currently, Hyundai Motor Group manufactures cars in the U.S. using steel sheets produced at Hyundai Steel’s plants in Korea.
If Hyundai Steel does decide to build a steel mill in the U.S., it would mark the company’s first overseas facility.
Hyundai Motor Group’s prioritization on the U.S. market can also be detected in other strategic decisions.
The group reportedly has decided not to participate in the upcoming Shanghai Motor Show in April. This would mark the first time that Hyundai and its sister Kia Corp. skip the Shanghai Motor Show since entering the Chinese market in 2002.
Hyundai and Kia have struggled to captivate the Chinese market, the largest automotive market in the world, for some time due to steep price competition from local players, such as BYD Co.
“The move not to participate in the Shanghai Motor Show appears to be a strategic decision to concentrate resources on the U.S. market,” an industry observer said, asking not to be named.
(Yonhap)
