January 18, 2017 12:49
Hyundai on Tuesday announced plans to invest US$3.1 billion in the U.S. over the next five years. The announcement follows U.S. president-elect Donald Trump's threat to slap a 35 percent tax on car imports from Mexico, where Hyundai makes cars for the American market.
"We have to be committed to the U.S. market -- a strategically important market which can make or break our global success," Hyundai Motor president Chung Jin-haeng told reporters.
The planned investment is more than 50 percent higher than the $2.1 billion Hyundai spent in the U.S. over the last five years.
Hyundai has a car plant in Alabama, while affiliate Kia owns a factory in Georgia capable of producing 710,000 vehicles a year.
Chung said the plans have nothing to do with Trump's threat. "The amount is just 30 percent of the W12.5 trillion we invested in Korea last year (US$1=W1,171)," a Hyundai staffer said. But industry watchers note that the announcement is closely timed with Trump's inauguration on Friday.
Toyota has already announced plans to invest $10 billion in the U.S. over the next five years but also said this has nothing to do with Trump's threat.
The U.S. is a key market for Hyundai and Kia. The world's second largest market after China, it accounted for 17 percent of their global sales last year.
Kia spent W1 trillion building a factory in Mexico last year capable of producing 400,000 cars a year, which is going to cost Hyundai dearly if it has to move its whole manufacturing base to the U.S.
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