Trump Effect: Hyundai Increases U.S. Investment By 50 Percent

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Hyundai Motor Group announces plans to raise U.S. investment to $3.1 billion – a 50 percent increase – over the next five years and build a factory on U.S. soil.

President-elect Donald Trump recently made threats to increase tax imports by 35 percent on vehicles imported from Mexico, where manufacturers take advantage of cheap labor costs.

As a result, a number of major automakers like Toyota Motor Corp, Ford, and Fiat Chrysler, and General Motors (GM) have recently declared an increase in U.S. investment plans for new vehicles, technology, and components, which could create thousands of new jobs.

According to a Reuters report, the Hyundai Motor Group announced on Tuesday that its subsidiaries, including the Hyundai and Kia brands, have allocated $3.1 billion for supporting their factories in Georgia and Alabama. The investment was previously $2.1 billion during the last five years.

President of Hyundai Motor Group, Chung Jin-haeng, clarified that the investment was not a direct result of Trump threats. He told reporters, “We have to be committed to the U.S. market – a strategically important market which can make or break our global success.”

Jin-haeng said they are discussing building a new factory to build high-margin and popular models, but that decision is contingent on increased demand for it under the Trump administration.

He added that the $3.1 billion dollar investment will be used to retool existing factories in the U.S. and advance research efforts on self-driving cars, artificial intelligence, and a host of futuristic technologies.

Lastly, Jin-haeng told reporters that the Kia plant in Mexico is a “source of worry” because an estimated 80 percent of Kia vehicles are produced at the facility and need to be exported and allocated to other markets, with the U.S. being the main recipient.

H/T: Reuters

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