It is confirmed that Hyundai & Kia Motors has already re-confirmed the local production system before the amendment of the free trade agreement (FTA) with the US amid growing US protectionism.

The company is expected to produce more than 1 million units in 2021 with the addition of Tucson to Tucson, Tucson pickup trucks and Soul.

According to the data obtained by Hyundai Motor on April 5, Hyundai Motor has added 70,000 follow-up models and 60,000 Tucson pickup trucks to Tucson`s Alabama plant in the US in order to mass production in 2021. Hyundai Motor originally planned to produce 556,000 units in three models, including the Avante, Sonata and Santa Fe, by 2020, but the two models were added.

As a result, the production capacity of Hyundai Motor`s US plant will increase to 666,000 by 2021. We will add two Tucson models and instead reduce the production of Avante by 20,000 units. As of last year, the production capacity of this plant is about 370,000 units.

Kia Motors has added another production model to the US plant in Georgia in 2020. In the past, it decided to produce medium-sized SUV (SUV) `ON (project name)`, followed by K5, followed by Sorento, and decided to add Soul to it. Accordingly, the production capacity of the Georgia plant is expected to increase from 340,000 units in 2007 to 370,000 units in 2020. 140,000 units of Sorento, 120,000 units of K5, 60,000 units of ON, and 50,000 units of Soul are produced at this factory. A senior research fellow at Lee Hang-gu Industrial Research Institute (KIET) said, "We seem to have decided to reduce the production of cars with less competitiveness and to introduce cars that can replace them."

At the same time, Hyundai and Kia are expected to build a "1 million-unit system" at a US factory by 2021. The industry is paying attention to the fact that Hyundai Motor has already decided to produce Tucson pickup trucks before the briefing of the FTA negotiations last month. Under the existing agreement, the United States decided to completely eliminate the 25% tariff on pickup trucks by 2021, but the agreement extended the period of elimination by 20 years until 2041.

Meanwhile, Hyundai and Kia will also be able to respond to President Donald Trump`s demand to expand their own investment. Hyundai Motor Group plans to invest USD 3.1 billion in the US in the five years since Trump was inaugurated in January last year.

On the other hand, it is inevitable that there will be friction with the labor union as Hyundai decided to mass-produce pickup trucks in the United States. The union issued a statement shortly after the government announced the amendment to the FTA, stating that the government has extended the deadline for abolishing US tariffs by 2041 because there are no domestic companies producing pickup trucks. "

By Kim Yang Hyuk mj@


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