Hyundai To Boost Investment In The US To $3.1 Billion Over 5 Years

Tyler Durden's picture

Having been unleashed with a series of angry Trump tweets, the outpouring of carmarker investments in the US has turned into a veritable torrent, and just hours after GM announced it would invest $1 billion in new US factories, adding 1,000 jobs, Korea's Hyundai Motor Group said it also plans to lift U.S. investment by 50% to $3.1 billion over five years and may build a new plant there. It has become the latest auto firm to announce fresh spending following Ford, Fiat, Toyota and GM, after President-elect Donald Trump threatened to tax imports.

As a reminder, Trump has repeatedly warned of a 35% tax on vehicles imported from Mexico, where many automakers have taken advantage of the country's lower labor costs. Toyota Motor, Ford, and Fiat Chrysler have all recently unveiled new U.S. investment plans, while over the weekend German automakers were the latest to come under fire from Trump, provoking a blistering response from Angela Merkel.

According to Reuters, Hyundai Motor and Kia Motors which make up the Hyundai Motor Group have not been directly criticized by Trump but they may have felt vulnerable because among major brands, they have one of the lowest ratios of cars built in the United States to cars sold.

To be sure, just like all other carmakers who reacted to pressure by Trump, only to deny they did so, Chung Jin-haeng, president of the group, denied the plan was due to, drumroll, pressure from Trump, adding that a new U.S. factory would depend on whether demand improved under the next U.S. administration.

"We have to be committed to the U.S. market - a strategically important market which can make or break our global success," he told reporters in Seoul on Tuesday.

Hyundai plans to spend the $3.1 billion to retool existing factories in the United States and boost research on self-driving cars, artificial intelligence and other future technologies, Chung said.

He also said that the group is considering a new U.S. factory to build high-margin, high-demand models such as a U.S.-specific sport utility vehicle and a Genesis premium vehicle. That would come on top of Hyundai's factory in Montgomery, Alabama, and a Kia plant in West Point, Georgia.

Analyst, meanwhile, are skeptical if this presidential pre-appeasement will work:

Ko Tae-bong, an auto analyst at Hi Investment & Securities, said that while the increased investment would please Trump, it would be risky move to invest in a new U.S. plant. "This could be a trap for Hyundai," he said, citing peaking U.S. market demand and the group's sagging global sales. Kia also has a plant in Nuevo Leon, Mexico, at which Hyundai plans to start making cars this year.

But Chung said the group was 'agonizing' over the Mexico plant.

 

It just started production last year as Trump threatened a big tax on imports from Mexico and as U.S. demand for smaller cars, which Mexican plants tend to specialize in, is shrinking.

 

Kia said last year that it plans to build 400,000 vehicles a year at its Mexico plant, but a spokesman said on Tuesday that the output figure was subject to change.

Meanwhile, the biggest Korean carmaker is facing rising global pressure Last year Hyundai and Kia posted a 2 percent decline in combined annual global sales - the first fall in nearly two decades, although the duo have forecast sales to rebound 5 percent in 2017.

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Vinividivinci's picture

I'm just gonna put this out there....
All these "miracle jobs" annoucements are to
lift our hopes so high, so that the shock of an "event" against
Trump will be all the more traumatizing.
Make sense ?

BabaLooey's picture

IF the deep state - and any of these punk butt-hurt losers try any stupid shit, PLENTY of liberal cunts will have more targets painted on their backs than a Sherwin-Williams store room.

 

CheapBastard's picture

OMG!

 

More job creation will surely trigger the Dems and people like Lewis...drives them crazy.

Raging Debate's picture

You no invest you no have US mahket. Smaht Kohweahs. 

 

lil dirtball's picture

>... more targets painted on their backs than a Sherwin-Williams store room.

I don't get it. Does Sherwin-Williams also manufacture targets? Are they one-size-fits-all, or are they produced for different applications? Are targets necessary to store paint; is the word 'backs' proprietary verbiage for paint storage? I've never heard it used as such. Does all of this apply only to Sherwin-Williams - or do all paint manufacturers use the same terminology/tech?

Please pardon my ignorance concerning Sherwin-Williams and store room targets - I've only been here a few months and don't mean to imply that your posts are incoherent. Perhaps this was all discussed last year, IDK? I don't mean to recycle what everyone else already understands on this topic.

Déjà view's picture

60 years ago they laughed at Japanese vehicles...30 years ago at Hyundai...what happened to Chicom developed vehicles...WAITING HOW MUCH LONGER? 

NoPension's picture

From my limited experience with Chinese machinery....you do not want a Chinese engineered car.
They steal and copy. But they do not "understand" the why.

I can't explain it. It just is. Perhaps it is a culture of doing what you are told, and not stepping out of line. The engineers are smart and educated, but there is zero imagination.

Stuck on Zero's picture

Screw Hyundai. It's a giant, corrupt, state sponsored industry. Korea doesn't allow foreign cars into their country ... why should we allow Korean cars in the US?

Jay's picture

Several US automakers sell in S Korea, including Tesla. Do the exports to S. Korea have to be cars? S. Korea imports $60B of stuff annually from the US.

angry_dad's picture
angry_dad (not verified) NoPension Jan 17, 2017 1:31 PM

The chinx are the largest auto mfg on the planet.

IF cankles got elected, the usa would soon be drowned in chinx cars pouring onto our docks while the deplorable gringo auto workers would be washing them.

BabaLooey's picture

It's apparent there is a LOT you "don't get".

lil dirtball's picture

There is. W-will you be my mentor?

School me.

BabaLooey's picture

REVERSE SKATE!

Notice: Hardly ANY of this is being reported on any of the crytard, douchebag, leftist butt-hurt Lame Stream shitchannels.

It's all "Lewis this, and Lewis that" - and how many Dumb Democrats are not going to the inauguration. 

THEY STILL................DON'T.....GET IT.

Hyjinx's picture

They can't "get it." 'It' invalidates them.

LordDampNut's picture
LordDampNut (not verified) Jan 17, 2017 9:36 AM

How are they going to compete with all these extremly well made american cars? 

Never One Roach's picture

Job creation is definitely racist by the reaction the Democrats show to it.

yttirum's picture

Ah, and so it begins. The concerted effort and alliances to take down China. This whole China thing is a sham. We got fireworks and they got everything else.

Posa's picture

That's a paranoid frame of mind... the US and the West has to negotiate a general agreement with China that acknowledges their superpower status without cannabilizing our domestic industry and workforce to predatory practices.

China knows this and has been trying to open low-cost markets in the Developing Sector... deals can be brokered... providing all parties are operating from a position of good will and mustual gain... It also means the US has to drop the drive to to global hegemony...

yttirum's picture

I don't think it's paranoia, at all. I agree with most of what you say, but none of that will happen until the pressure is applied and they are put in their place. I honestly see a changing of the guards in China as it concerns their government. They are being outted on the world stage and I can't see the powerful within China letting their government take them down with 'em.

Posa's picture

Alternatively, The US can also start by issuing cordial invitations for candid discussions with the Chinese leadership and take things from there... such a spirit could greatly alleviate tensions and might well produce faster and better results... if that fails, then more unilateral efforst have to be taken...

This would all work out better with cooperation... the Us can't terminate trade with China overnight ... better to negotiate a plan that works out over months and years so both sides can adjust

 

Raging Debate's picture

Yttrum - a current war is now real with China. Business will follow the currency in short term ping pong. Take the money while it's there and hedge and I don't mean just gold. Hedge with beans, means for home defense/hunting, water purification. Hedge against world war. I know every other person just says 'hey I would rather get vaporized but odds are you'll survive, at first anyways. Be a good Boy Scout and be prepared. If you never need it, that would be best. And I pray you never do. 

Posa's picture

Direct investment from overseas forms os the best way around protective tariffs... Korea pay scales are low and would have been hit with tariffs... instead of paying their workforce more, tyhey can open factories in the US and pay at US levels of compensation (but a high percentage of parts have to be built to US standards as well)... China can do the same...

Bilateral deals for specific sectors are possible too with selective exemption from overall tariffs... there's a lot of room for creativity exercised in the interest of the US labor force... what is being eliminated is multi-nationals playing wage arbitration games and calling it "free trade"

So Trump may very well be on the right track here.

yttirum's picture

Hmm. Japan and S. Korea? I'll be waiting to here from the Philipines and Indonesia, next. Taiwan, well, we already know what's up with them. Shit, even ChinkCo is trying to get in, but to their dismay, will soon be seeing the light through their tunnel of vision. The alliances if forming and Chicom will be on the ropes, shortly.

FlKeysFisherman's picture

So called progressives love the fact that the middle class is decimated. They gloated and celebrated it right out in the open.

 

They also created the dishonest narratives that robots had suddenly taken millions of jobs and that manufacturing "could never come back." We've been in an economic civil war for many years with the Left working to destroy the flyover states.

 

Then you have the psychological warfare dimension with non-stop anti-white propaganda coming out of Hollywood, gaslighting and all around degeneracy.

 

Incredible. Thank God we're finally fighting back.

 

 

StreetObserver's picture

Do what you can to fight these Hollywood bastards by denying them your dollars. Stop going to movies.

If you are a serious Trump fan you will be already avoiding any discretionary spending for the rest of this month as a final kick in the pants to the Obamanation. Spend after February first.

Take all  your CDs that you don't listen to, all the DVDs  you no longer watch and sell them cheap in a garage sale, donate them to the library for circulation or set up a trading post for them on Craigslist.

Invest in a can of  white paint, make your own movie screen on a wall at home: It's a couple hours of work and $75 worth of material. It really works well in a room painted a dark color.

http://www.projectorcentral.com/paint_perfect_screen_$100.htm?page=Paint-the-Screen

Buy a video projector, a surround sound system and an old laptop that you can hardwire to your router. Check Craigslist for used.  Stream Netflix or HD videos on youtube. If you have already paid and cannot get your money back, Amazon Prime videos if you are handing money to the Bezoar, who don't forget, strongly supported Hillary.

Stop handing  your money to the enemy.

 

saveUSsavers's picture

And they are expecting a NEW ROUND OF SUBPRIME AUTO LOANS?

angry_dad's picture
angry_dad (not verified) saveUSsavers Jan 17, 2017 1:27 PM

AS new cars are now priced at record high prices, the 0% financing hides the 30% overcharge on the 60 month 0% loan.

Sadly, most gringos don't realize this until they try to trade them at 3 years and learn they are hopelessly underwater on these clunkers.

geno-econ's picture

Hyundai's line up  of new Ioniq hybrids will have better perfotmance than Toyota's Prius line up and will come in all electric, plug in and standard hybrid versions. No doubt will dig into Toyota sales.  Also Kia coming out with Niro,a small SUV hybrid with excellent milage similar to Prius.  Korean auto sales will displace Japanese manufacturers rather than US car sales. Northeast and West coast love imports while mid America loves Chevy's and Cadillacs. Trump does not change this dynamic unless tariffs and  tax credits change or we have a deep recession and credit freeze whereby all auto sales tank.    

angry_dad's picture
angry_dad (not verified) Jan 17, 2017 1:24 PM

A 35% tariff will take the luster off the Hyundai's and Kias


geno-econ's picture

That is why Koreans prepared to invest in US.  However raising auto tariffs by 35% will not be easy and must comply with WTO rules as well as USTR procedures proving predatory pricing, dumping,injury, etc. Not easily or quickly accomplished.