Seoul, March 25
Hyundai Motor Group's decision to invest $21 billion in the United States over the next four years is being seen as a bold strategic move to solidify its competitive edge in its single-largest national market, industry observers said on Tuesday.
The plan, unveiled by Hyundai Motor Group Executive Chair Euisun Chung, alongside President Donald Trump and Louisiana Gov. Jeff Landry, at the White House, is expected to sharpen the group's position in the increasingly competitive U.S. auto landscape, reports Yonhap news agency.
It marked the first major U.S. investment plan announced by a South Korean conglomerate during Trump's second term.
Last year, Hyundai and Kia sold a combined 1.7 million vehicles in the U.S., a 3.4 percent on-year increase and making the group the fourth-largest global automotive group in the U.S. market.
The announcement comes as global automotive groups are bracing for looming reciprocal and sectoral tariffs on their exports to the U.S., which Trump has pledged to introduce since his election campaign.
Observers view the timing and scale of the investment as a direct response to the Trump administration's trade policy, which has consistently emphasized local production as a means of avoiding punitive tariffs.
"The move appears to be designed to respond to Trump's trade policy emphasising the revitalisation of American manufacturing," an automotive industry observer said, while asking for anonymity.
Trump himself highlighted the announcement, stating, "Hyundai will be producing steel in America and making its cars in America," and noted that the automotive group "will not have to pay any tariffs" due to its commitment to local production.
It remains unclear whether Trump was offering a general message in support of localised production or hinting at a specific tariff exemption for Hyundai. Still, his comments suggest the group's aggressive investment commitment may lead to favourable treatment under Washington's new trade policy.
A centerpiece of the plan includes expanding production capacity at its Hyundai Motor Group Metaplant America (HMGMA) in Savannah, Georgia, from 300,000 to 500,000 units per year.
"With this, our U.S. vehicle production will exceed 1 million units per year," Chung said. "Our decision to invest in Savannah, Georgia -- creating more than 8,500 American jobs -- was initiated during my meeting with President Trump in Seoul in 2019."
Additionally, Hyundai Steel Co. will build a 2.7-million-ton electric arc furnace (EAF) steel plant in Louisiana, a move that may further improve Hyundai Motor's competitiveness in the U.S. market.
The Trump administration began imposing whopping 25 percent tariffs on all steel imports earlier this month and is set to roll out fresh import tariffs on autos, in addition to country-by-country "reciprocal" tariffs on April 2.
