Hyundai releases statement to dispute plan to build plant in Mexico

Article by Andrew Christian, on April 21, 2015

A statement released by Hyundai Motor Co. last Wednesday denies a plan to build a plant in Mexico. In a Bloomberg report that came out on Tuesday, Pedro Albarran, managing director for Hyundai Motor de Mexico, had said that Hyundai may construct a factory in Mexico as soon as the automaker’s domestic auto sales increase in the country.

The top Mexican official, who heads sales and marketing but not manufacturing, added that Hyundai hopes for Mexico to become a “very important base” for its global production. He said that the brand will soon produce Hyundai units in Mexico but then it will have to wait for annual domestic sales to surpass 50,000 units before opening a factory.

Hyundai started sales in Mexico last year with 12,000 units. It forecasts that by 2018, its sales will exceed 50,000. Albarran said that an announcement about this plan may be made before then. In Hyundai’s statement disputing the claim, it clearly said that it “does not have any plan of building a factory in Mexico.”

This is actually a delicate time for Hyundai, which has been trying to get government incentives for the expansion of its lone assembly plant in North America located in Montgomery, Ala. Last March, Korean news agency Yonhap said that Hyundai is thinking of building another assembly plant in Montgomery that can produce 300,000 units annually.

The automaker’s plan had been to begin producing SUVs in 2017. Back then, Hyundai stated that there were no plans to expand its plant in the U.S. A number of global car brands have put up plants in Mexico. Hyundai has wanted to construct a plant in Mexico for many years now. A report in 2007 had pointed this out.

Just last Wednesday, Toyota Motor Corp. announced a plan to operate its first passenger-car plant in Mexico as the Japanese resumes projects to build plants. In a separate matter, Ford Motor Co. revealed last Friday that it will invest as much as $2.5 billion in engine and transmission operations in Mexico.

When Kia announced its plans for Mexico last year, other companies followed suit. A joint operation to build a new plant was undertaken by BMW AG, Daimler AG and Nissan Motor Co.

Production of automakers like Nissan, Honda Motor Co. and Mazda Motor Corp. has been ongoing in Mexico since November 2013. Albarran also talked about the state of Nuevo Leon as an ideal site for Hyundai after Kia disclosed last year that its first Mexico factory will be in that area and that it will cost over $1 billion.

He estimated that a Mexico plant there would likely produce over 100,000 vehicles annually, which will include subcompact models that are topsellers in Mexico. Albarran said that when Kia decided to have a plant in Mexico, it made it a more striking option for Hyundai as it attracted suppliers.

Topics: hyundai, mexico, plant, plan

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