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Discussion Starter #1
Wanted to post this in the news section but I'm blocked for some reason.

Hyundai Motor actively considering new US factory - CFO | Reuters

(Reuters) - South Korean automaker Hyundai Motor said on Thursday it is "actively" considering building a new U.S. factory, citing its limited production capacity and the market's growth prospects.

"We continuously feel the need to expand the capacity of our U.S. factory," Chief Financial Officer Lee Won-hee said in a conference call after the company reported first-quarter earnings.

The executive said Hyundai is considering which models to make at the prospective new factory, in light of growing demand for sport utility vehicles. (Reporting by Hyunjoo Jin; Editing by Kenneth Maxwell)
UPDATE 2-Hyundai may boost SUV capacity in US, China after profit dips | Reuters

SEOUL, April 23 (Reuters) - South Korea's Hyundai Motor may boost production of sport utility vehicles in the United States and China after reporting profits fell again, squeezed by the cost of promotions to bolster car sales and unfavourable foreign exchange trends.

Hyundai, which together with affiliate Kia Motors ranks fifth in global sales, said net profit eased 1 percent to 1.91 trillion won ($1.77 billion) in the January-March period from 1.93 trillion won a year earlier. The decline was its fifth quarterly profit drop in a row.

While rivals cash in on the sport utility vehicle (SUV) boom, spurred in part by cheaper fuel, Hyundai has grappled with a lack of production capacity and absence of new models in the segment.

The firm said it expects earnings to improve in the current quarter, fuelled by overseas rollouts of the latest version of its Tucson SUV.

"We were not able to cope with the market demand because of SUV capacity constraints, which have impacted our earnings," President Lee Won-hee said on a conference call.

Hyundai is "actively" considering boosting production capacity in the United States, as well as China, to keep up with market growth, Lee said.

He said the company is also "cautiously" considering entering the pick-up truck market, a segment dominated by U.S and Japanese rivals.

Hyundai and Kia raised their 2014 vehicle sales targets late last year even as demand for their mainstay sedans stalled. Hyundai was forced to boost sales promotion incentives by nearly 30 percent in the U.S. market, to an average $2,200 per vehicle, in order to clear inventory during the quarter.

At the same time, the South Korean won strengthened against currencies in Russia, Brazil and Europe, eroding overseas earnings. More than 85 percent of Hyundai's vehicle sales are booked outside its home turf.

To ease the impact of weaker emerging market currencies, Hyundai has raised vehicle prices in Russia and Brazil, and increased the portion of exports from plants there as well as local parts sourcing.

Lee said Hyundai won't freeze production in Russia. Instead, the firm's goal is to boost market share and emerge as a winner when the rouble stabilises.

Lee reaffirmed that Hyundai is actively considering whether to pay an interim dividend as part of efforts to continuously raise dividend payouts.

Its shares ended up 3.2 percent after the earnings announcement, while the broader index was 1.4 percent higher.

So not just an expansion of a current US factory, but maybe an all new factory.

Also, the headquarters in South Korea is "cautiously" considering the Santa Cruz while the US division is all for it. We'll see how this plays out.
 

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If its a brand new factory then I bet they would look into Mexico. if it is simply expanding what is already there then more US capacity makes sense.
 

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If they build a new factory just for CUVs and trucks, they would need to keep it in the US near to the current factories. The Hyundai and Kia CUV production would still need to be split between more than one factory, and since those vehicles share many components, keeping the factories close by minimizes part and sub-assembly shipping costs.
 

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If its a brand new factory then I bet they would look into Mexico. if it is simply expanding what is already there then more US capacity makes sense.
Even more so as its right across from one of their biggest markets with low costs, big win, no need to have ships move them.

But build quality will be up for discussion as there are concerns with production quality in Mexico.
 

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Even more so as its right across from one of their biggest markets with low costs, big win, no need to have ships move them.

But build quality will be up for discussion as there are concerns with production quality in Mexico.
But as long as the company is competent they shouldn't have an issue with quality control. I think that quality is more a reflection on the company than the country.
 

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But as long as the company is competent they shouldn't have an issue with quality control. I think that quality is more a reflection on the company than the country.
That is true.
As long as they ensure they are properly training employee's, following up on the work they're doing and having specific quality control measures in place, there should be reduced problems.
 

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I just refuse to believe that with all of the factories being built in mexico, all the vehicles coming out of there will be of worse quality. Car companies are smarter than that. Region may have a bit of an impact on quality control, but that impact should be taken care of by good management practices. Poor quality vehicles getting through would just show that there are flaws in the companies broader quality control policies.
 

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I guess we'll see come time for these vehicles to hit the road, rack up some decent mileage that would prove it's been put through its paces enough to show any issues.
 

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It will be cool to see mules out testing in the future. That will tell us a lot about what we can expect. And show us that the quality will be up to par.
 

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It will be cool to see mules out testing in the future. That will tell us a lot about what we can expect. And show us that the quality will be up to par.
How can you possibly gauge the quality of a vehicle from spy shots of it while covered up? That's impossible.
 

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i like the sounds of "cautiously" considering entering the truck market
with what we've been seeing from other truck makers, information coming to light about similar style trucks, looking at this segment cautiously, they should find ways to justify it and see real profitability.
 

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I am guessing that they really are going to be looking at how the other trucks in the segment are doing and judging if there is opportunity there or not. No point entering a segment where you are almost assured to lose.
 

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the concept can be said to be proof of them seeing the potential
to get to that stage, creating a concept, there's quite a lot of thought processes going on to make that call
 

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Potential, but not really for sure. There have been plenty of concepts, even concepts that were very likely going to go to production, that never became production vehicles. I'm not saying that its not going to happen, I'm just saying that stranger things have happened.
 

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The difference is this speaks to some needs in the market that once were well and alive, the 90's had trucks like this and they were much more widespread.
 
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