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Hyundai to invest US$270 million in new engine plant

"[The plant will] enable Hyundai to serve its growing manufacturing operations in the United States."

Hyundai statement

South Korea's top automaker Hyundai Motor Co announced yesterday a plan to invest US$270 million to build a second engine plant to meet growing demand in the US.

Meanwhile, the Seoul-based carmaker said it also planned to make 300,000 gasoline-electric or diesel-electric powered vehicles by 2015 as customers opt for more fuel-efficient cars.

In a statement released yesterday, Hyundai said the US factory, specializing in 2.4-liter engines, will be part of Hyundai's current facilities in Montgomery, Alabama, with mass-production due to start in September next year.

The South Korean firm has invested US$1.1 billion since 2005 on its Mongomery facilities, including a 3.3-liter engine plant. The first Hyundai plant in the US has the capacity to produce 300,000 vehicles per year.

Sister company Kia Motors has also been constructing its first US plant in West Point, Georgia, since last year.

The new engine plant will "enable Hyundai to serve its growing manufacturing operations in the United States, including supplying engines to the new Kia [Motors] plant" in Georgia, the statement said.

The Ministry of Commerce, Industry and Energy said yesterday in a statement that Hyundai aims to develop cars with fuel efficiency 50 percent greater than current models, and the plan includes production from Hyundai's affiliate Kia Motors, it said.

Hyundai is trying to catch up with Toyota Motor Corp and Honda Motor Co, which already sell hybrid vehicles.

Higher fuel prices and stricter emissions regulations have raised demand for hybrid vehicles.

Hyundai will begin commercial production of hybrid vehicles in 2009, the ministry said.

The carmaker aims to develop hybrid engines that would reduce emissions by 30 percent compared with current models, the statement said.

Hyundai has requested the government provide tax incentives for hybrid car buyers, it said.

Hyundai Motor is also seeking to begin commercial production of fuel cell cars by 2010, the statement said.

Hyundai Motor Group, which includes Kia, controls 70 percent of South Korea's auto market.

It aims to be one of the world's top five largest automakers.
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