New Plant Announcement from Hyundai-Kia Soon?

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Last summer during a discussion with senior Hyundai management in Seoul, I asked “When can we expect to see a third plant for Hyundai and or Kia in the United States?” The response was “A third plant will be necessary when Hyundai and Kia sell 900,000 per year in the USA.”

In 2010, Hyundai sold 538,228 cars and light trucks in the USA and Kia sold 356,496 cars and light trucks. That is a total of 874,496 cars and light trucks for these two fast-growing brands. That number is also close enough for us to hypothesize that an announcement for a third Hyundai or Kia plant in the USA should be forthcoming.

Two USA Plants Already at or Above Capacity: Clearly, Hyundai is pushing the capacity of their Montgomery, Alabama plant. With the Sonata Mid-Size Sedan setting all-time sales records and the newly launched Elantra promising to sell very well, Hyundai Motor Manufacturing Alabama is out of capacity even at its increased capacity planning volume of 400,000 units. Hyundai has announced it is importing Elantras from Korea to meet extraordinary demand in the USA. Kia is adding a third shift to its West Point, Georgia plant producing Kia Sorento and Hyundai Santa Fe crossover sport utility vehicles.

Rumor – Mississippi Hyundai-Kia has likely squeezed as many concessions as possible from Alabama and Georgia to support its two plants there.  A logical next choice still within range of Hyundai and Kia suppliers is Mississippi.  With a third plant in the offing, any state would be willing to offer substantial concessions for the investment dollars and jobs a large scale plant inevitably generates.

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