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The Hyundai Motor factory in Alabama

Hyundai Motor Company President Jung Jin-haeng announced on Jan. 17 that the Hyundai Motor Group would be investing US$3.1 billion in the US over the next five years. This represents a major increase from the US$2.1 billion invested over the previous five years.

This was the backbone of the Hyundai Motor Group’s mid- and long-term investment plan in the US, as laid out by Jung in a meeting with foreign correspondents on Jan. 17. “This money will be used to increase our investments in R&D for new technology for the future such as eco-friendly cars and self-driving cars, to produce new models at our existing production facilities and to invest in improving the environment,” Jung said.

Jung also said that the company would review the possibility of building a new factory in light of future industrial demand trends in the US.

When asked for comment, a group spokesperson said, “Demand in the local market and the domestic and foreign environment are some of the factors affecting the construction of a new factory. As such, details such as the scale of production, the area of construction and the company building it will be determined in the future after a thorough review.”

The Hyundai Motor Group’s announcement of its mid- to long-term investment plan in the US is attracting attention since it comes on the heels of Ford and Fiat Chrysler canceling plans to set up factories in Mexico and Toyota unveiling a plan to invest in the US.

“Our investment activity plan was reviewed in line with our normal management activity, and it has nothing to do with remarks by [American President-Elect] Donald Trump,” Jung insisted. But the Hyundai Motor Group’s investment plan is prompting several interpretations, since it comes at a sensitive time when a series of major automakers around the world have bowed to pressure from Trump by releasing plans to build factories or make investments.

Trump has threatened to impose stiff tariffs on companies that sell cars in the US that were made in Mexican factories, mentioning by name not only American companies such as Ford and GM but also Toyota and BMW. As a result, Ford scrapped its original plan of investing US$1.6 billion in building a factory in Mexico and announced that it would be investing US$700 million in its factory in Michigan.

Fiat Chrysler also promised to invest US$1 billion in production facilities in Michigan and Ohio, and Toyota said that it would invest US$10 billion in the US over the next five years. While GM, the largest automaker in the US, has thus far resisted Trump’s pressure, it will soon be announcing an investment plan in the US worth US$1 billion.

Hyundai and Kia had stated that they would not allow Trump to bully them into building factories or investing in the US. Hyundai has had a factory in Alabama since 2005, and Kia has had one in Georgia since 2009. Hyundai Motor has seemed perplexed amid recent speculation that it is looking into the idea of building another factory in the US. “Hyundai and Kia have not received any messages whatsoever from the Trump administration. All we did was announce our mid- to long-range investment plan in the US at the appropriate time,” said a spokesperson for the Hyundai Motor Group.

If the group’s explanation is correct, it apparently opted to have reporters at major foreign media communicate its investment plan to the Trump administration. Some analysts even think the group has raised the white flag before even coming under pressure from Trump.

By Hong Dae-seon, staff reporter

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