- Hyundai Motor Group said it will significantly increase its investment in the US
- By contrast, the company did not plan to make additional investments in Mexico
- Since Trump’s election victory, he has pressured car firms to build vehicles in US
Hyundai has become the latest car company to curry favor with President-Elect Donald Trump by announcing it will plow $3billion into its US factories over the next four years.
Since Trump’s election victory, he has pressured car companies to build their vehicles in the US rather than Mexico.
The brash billionaire warned that cars built in Mexico would be taxed at 35 per cent if they were exported to the US.
In the wake of that, Hyundai has now pledged to invest more heavily in the US.
Donald Trump has warned that cars built in Mexico would be taxed at 35 per cent if they were exported to the US
Chung Jin Haeng, president of the world’s fifth-largest automotive group, said it will spend $3billion on research, development and maintaining their factories in Alabama and Georgia.
He also said the South Korean company will consider building a new US factory if demand for cars rises during Trump’s administration.
The new administration’s promise to create 1million jobs and attract new companies could stimulate demand for cars and other products, he said.
He said: ‘If there is such a sign, we will immediately review (the new plant). We won’t miss when the time is right.’
Hyundai Motor Group said it will significantly increase its investment in the US, in the wake of comments made by Donald Trump
Hyundai and affiliate Kia Motors did not provide any further details about a possible new plant.
The group does not usually disclose its five-year investment plan for specific countries, and the announcement of the US-specific investment plans comes just three days before Trump’s inauguration.
Kia’s first Mexico plant launched operations just two months before the November 8 election and the group said about 80 per cent of the vehicles made there would be exported.
The plant has a capacity to turn out 400,000 cars per year.
However Chung said the Mexico plant was now a ‘source of worry’, without elaborating why. He said Hyundai did not plan to make additional investments in Mexico.
Chung denied that political pressure was behind the firm’s announcement.
‘The US market is strategically important for us. Success of the failure in the US market is a measure of global success’, he explained.
GENERAL MOTORS TO BOOST INVESTMENT IN US FACTORIES
General Motors is set to announce a massive billion-dollar boost to investment in the US that will create more than 1,000 new jobs.
The car giant is gearing up to pump $1 billion into several factories across the country.
Company insiders told the Wall Street Journal the move is designed to reaffirm its commitment to manufacturing in the US.
However, GM denied any future changes will be in response to Trump’s comments, claiming investments of this magnitude had been talked about and planned for ‘some period of time’.
Since his election victory, Trump has advised companies ‘not to waste their time and money’ by building car factories in Mexico.
He has threatened to impose a border tax on cars made in Mexico by Ford, General Motors and Toyota.
In a tweet on January 3, Trump said: ‘General Motors is sending Mexican made models of Chevy Cruze to US car dealers-tax free across border. Make in US or pay big border tax!’
Automakers have responded to his threat by affirming their commitment to the US market.
Earlier this month, Ford announced it had scrapped plans to build a new $1.6billion small-car factory in Mexico while Fiat Chrysler announced a $1billion investment plan in its two US factories.
Nearly all automakers build small cars in Mexico to take advantage of its lower wages.
In an interview with German newspaper Bild, he singled out German car giant BMW, which is building a plant in Mexico, with the threat of the 35 per cent tariffs.
However German economy minister Sigmar Gabriel said that rather than trying to penalize German carmakers, the US should instead build better vehicles.
He claimed imposing tariffs would make the US car industry ‘worse, weaker and more expensive’.
BMW, which is based in Munich, said construction of its Mexican factory was ‘continuing as planned and expected to be finished in 2019.’
Elsewhere, VW started production last year at a $1.3billion factory near Puebla.
Next year, Daimler is set to start making Mercedes-Benz vehicles at a $1billion plant it shares with Renault-Nissan in Aguascalientes, in north-central Mexico.