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Alabama Plant Expanding to Meet SUV Demand

Due to growing demand, earlier this year it was initially reported by reuters that Hyundai would expand to include a new production facility for larger and less fuel-efficient SUV's, spark by lower oil prices. In this report, 'pick-up-truck' mentions could be found: "Hyundai might transfer Santa Fe production to Alabama, which could also produce the Tucson and a pick-up truck"

  • Hyundai's U.S. executives want more SUV capacity
  • Hyundai U.S. sales hurt by lack of SUV supply
  • Hyundai shares up over 3 pct (Recasts with sources say plan is to expand existing factory, adds analyst's quote, company comment)
Hyundai Motor Co plans to expand its U.S. factory, three people familiar with the matter said, hoping to ramp up production of sport utility vehicles (SUVs) as lower oil prices boost demand for gas-guzzling trucks.

Sales of the South Korean automaker's sedans like the Elantra and Sonata are slowing in the United States as consumers take advantage of lower fuel prices to switch to bigger, less fuel-efficient SUVs.

"It's a new assembly line right next to the current Alabama line. State of Alabama is negotiating final terms," one of the sources said, referring to the company's planned new production facility.
He said Hyundai might transfer Santa Fe production to Alabama, which could also produce the Tucson and a pick-up truck. Hyundai currently does not sell a pick-up truck in the United States.
Yonhap reported the new plant in Alabama would have annual capacity of 300,000 vehicles and start SUV production in 2017.
Hyundai Motor will launch a revamped version of its Tucson SUV in Korea this month, followed by the United States and other countries.

What a Production Santa Cruz Would Be Like

Hyundai VP of Corporate and Product Planning, Mike O'Brien, was interviewed, shedding some light on what can be expected of the Santa Cruz, being ask how serious Hyundai is about and exactly how it'll be different than similar vehicles that came before it (think Subaru Baja

Reactions to the Santa Cruz Concept was generally positive. As Mike O'Brien put it, "There's been tremendous global interest in the Santa Cruz."

This suggests that the Santa Cruz will make it to production in some form or another, but there are still a lot of questions as to exactly what form that production model could take.
Described by O'Brien as "there are a lot of CUV owners who want a smaller vehicle with open bed space in the back for bikes and kayaks and other recreational gear." That extra utility should appeal to young, urban customers who want a smaller vehicle that still can handle some of the adventuring that they'd like to do on the weekends.
It is not that capable of towing, hauling and going off-road.
O'Brien says that the Santa Cruz will be different from other pickup-ish car models that have been tried in the past. Some of those other models were too expensive, or they made design compromises, like the Subaru Baja, which placed the rear axle in front of the bed. The Santa Cruz won't make such compromises and will keep the price reasonable.

Hyundai Likely to Green Light Production Santa Cruz Soon

Another Hyundai executive was interviewed following the previous report above, this time by, suggesting a very high probability of approval of the truck, and soon!

Hyundai Motor America CEO Dave Zuchowski told that "There is a very high probability we get the approval of the truck soon." Final approval still has to come from Hyundai corporate headquarters in South Korea.
The Santa Cruz was almost universally liked by focus groups. It got a 90% approval rating from potential buyers in product clinics.
So we should all be on the lookout for when final approval comes in from Hyundai's South Korean HQ.

Built On Tuscon Platform

Speaking with Scott, Margason, Hyundai Motor America's director of product planning, Edmunds was able to dig up more details about the Santa Cruz, getting clearer direction of what is to be expected.

Rather than creating a unique vehicle, the Santa Cruz will share its vehicle architecture and many components with the front-wheel-drive Hyundai Tucson SUV. The truck is expected to be all-wheel drive and cater to consumers who like the look of a pickup but don't want or need a rugged body-on-frame vehicle.
"We would not be starting from scratch with this vehicle, that is fair to say," Scott Margason, Hyundai Motor America's director of product planning, told Edmunds in a recent interview.
Margason estimated that approximately one to two years of development time would be saved, once it gets the go-ahead, compared with engineering a unique vehicle platform for the Santa Cruz.
A production Santa Cruz would seat five and feature ride and handling similar to a crossover SUV.
With the market slowly moving away from sedans to crossover SUVs, Hyundai needs additional crossover SUVs. Its current lineup includes the Hyundai Tucson, Santa Fe Sport and Santa Fe.

Hyundai has been talking about developing a pickup for about a decade.
The concept is equipped with a 2.0-liter turbocharged four-cylinder diesel engine producing 190 horsepower. Fuel economy is estimated in the high 30-mpg range.

A diesel engine is under consideration for the production vehicle, the industry source told Edmunds.

Hyundai to Begin Work On New Plant This Year

Sometime this year Hyundai will be selecting a site to build its 2nd U.S. plant with Alabama being "one of the possible sites." The plant could be used from May 2017 if construction starts this year.

Yonhap News Agency

SEOUL, June 22 (Yonhap) -- Hyundai Motor Co., South Korea's top automaker, plans to start building its second plant in the United States this year, a company source said Monday, an apparent move to meet growing demand in the American market.

Hyundai Motor currently runs a plant in Alabama that opened in 2005. It has been seeking to open a second one with negotiations going on with a couple of states to determine a final location.

Alabama is among the candidate states where the second plant will be built, a Hyundai Motor official said.

"Negotiations are underway to select a site where the plant will be built and Alabama is one of the possible sites," he said on condition of anonymity. "We aim to pick a site and launch the construction of the plant within this year."

He did not specify the other candidate states, saying it could affect the ongoing talks.

Hyundai Motor has been working to build its second plant in the U.S. as it is struggling to meet the growing demand in the market with its current production capacity. Car sales in the U.S. are expected to spike to 17.5 million units in 2017 from 16.8 million units this year.

The automaker is also faced with a shortage of sport utility vehicle models available to local customers at a time when its recovering economy and low fuel prices are boosting demand for SUVs. Hyundai Motor's first plant produces passenger sedans only.

In May, Hyundai Motor saw its sales in the U.S. plunge 10.3 percent from a year earlier. This is compared to 1.6 percent growth in total auto sales there.

Market experts say that the envisioned second plant will produce mostly SUV models to keep up with the growing demand.

The official close to the matter confirmed that the second plant would have an annual production capacity of some 300,000 units but added that car models to be produced there will be determined "depending on market demand and conditions."

If construction starts within this year, he noted that the plant will be up and running from May 2017.
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