[BahamaTodd]

Looking more and more positive.

UPDATE 2-Hyundai Motor plans to boost U.S. capacity as SUV sales rise-sources | Reuters

* 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)

By Joe White and Ben Klayman

DETROIT/SEOUL, March 11 (Reuters) - 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.

A Hyundai spokesman said there were "no plans at this stage" to increase capacity in the United States.

Hyundai Motor's shares rose as much as 3.2 percent to their highest intraday level in about two months on the news, initially reported by South Korea's Yonhap News Agency.

Hyundai currently builds its Santa Fe SUV at affiliate Kia Motors' production facilities in Georgia, while importing Tucson compact SUVs from Korea.

Hyundai's factory in Alabama builds its Elantra compact and Sonata mid-sized sedans.

Two other sources said Hyundai had been considering building a new U.S. assembly line to cope with SUV demand, but they had not heard about a final decision. The sources would not be identified because the matter was confidential.

"Hyundai needs to build a second plant in the U.S," Korea Investment & Securities auto analyst Suh Sung-moon said.

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.

U.S. sales of Hyundai, a strong performer during the 2009 global economic downturn, rose 4 percent from January to February, lagging the market's 9 percent growth.

Hyundai Motor will launch a revamped version of its Tucson SUV in Korea this month, followed by the United States and other countries.

Kia Motors plans to start production at its first Mexico plant in the first half of next year, to help ease capacity constraints at its U.S. factory.

($1 = 1,124.2100 won) (Additional reporting and writing by Hyunjoo Jin in SEOUL; Editing by Kevin Liffey, Richard Chang and Stephen Coates)

 

[BahamaTodd]

Yonhap reported the new plant in Alabama would have annual capacity of 300,000 vehicles and start SUV production in 2017.

If that's the case, the Santa Cruz will come to the market as a 2018 model. We've got a long wait.

That would also mean it would come with the Tucson's mid-cycle refresh.

 

[Santana]

If that's the case, the Santa Cruz will come to the market as a 2018 model. We've got a long wait.

That would also mean it would come with the Tucson's mid-cycle refresh.

With that year model to expect it as, more than likely news around it coming right from the source might finally start picking up...... late 2016 at best!

 

[Colin]

Great news for people in Alabama. I bet they need jobs there.

2018 is a bit of a wait. Was hoping for something a tad sooner than that, but w/e.

 

[Dex]

If that's the case, the Santa Cruz will come to the market as a 2018 model. We've got a long wait.

That would also mean it would come with the Tucson's mid-cycle refresh.

HMM... on the one hand, tying the two together visually could help showing peple its not a 'truck' per se, but then again tying them together visually might make it seem too much a derivative of Tucson...



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[BahamaTodd]

They would be tying them together as far as the platform goes. The Tucson and SC would get their own sheetmetal. They would most likely use a "flex" assembly line where you can build several vehicles on the same line. The Tucson would need to keep the softer styling while the SC would need to look more butch.

The Colorado/Canyon is a good example. They are built along with the fullsize vans:

 

[Santana]

They would be tying them together as far as the platform goes. The Tucson and SC would get their own sheetmetal. They would most likely use a "flex" assembly line where you can build several vehicles on the same line. The Tucson would need to keep the softer styling while the SC would need to look more butch.

The Colorado/Canyon is a good example. They are built along with the fullsize vans:

Great mention of the Canyon/Colorado.

The direction of design those took from their previous gen models was amazing.

I just hope Hyundai doesn't go too sporty with the SC, but rather makes it look bolder... pulling some boldness from american trucks, but not so much that it takes away from what the SC is all about.

 

[Colin]

Great mention of the Canyon/Colorado.

The direction of design those took from their previous gen models was amazing.

I just hope Hyundai doesn't go too sporty with the SC, but rather makes it look bolder... pulling some boldness from american trucks, but not so much that it takes away from what the SC is all about.

SO from what you are hoping for, do you want the SC to look very similar to the concept or are you hoping for something that deviates from that quite a bit?

 

[TimmyB]

I just saw this online tonight, raced over here to post it, and realized I'm only about 36 hours behind Todd!!! Must be that Daylight Savings Time, or something.

I am excited by the possibilities! Let's also realize, they are not necessarily going to build these vehicles EXCLUSIVELY at this plant; I doubt seriously that the 2016 Tucson is going to have to wait for this line to be up and running. Those cars will still be brought in from SK, or wherever, until that line is running. The same could be true for the SC, if it gets green-lighted.

 

[BahamaTodd]

Well looks like the site owners are also excited by the news with all the upgrades. lol

I am excited by the possibilities! Let's also realize, they are not necessarily going to build these vehicles EXCLUSIVELY at this plant; I doubt seriously that the 2016 Tucson is going to have to wait for this line to be up and running. Those cars will still be brought in from SK, or wherever, until that line is running. The same could be true for the SC, if it gets green-lighted.

This wouldn't be for the 2016 Tucson. They don't expect to be up and running until 2017 for 2018 model year vehicles. That would be around the right time more a mid-cycle refresh.

 

[TimmyB]

Well looks like the site owners are also excited by the news with all the upgrades. lol


This wouldn't be for the 2016 Tucson. They don't expect to be up and running until 2017 for 2018 model year vehicles. That would be around the right time more a mid-cycle refresh.

Right. That's what I was saying. Someone was saying above that this would mean we wouldn't see the SC until late 2016 or early 2017. I don't buy that. They would import it, along with the new 2016 Tucson, until this line is up and running.

That's my story and I'm sticking to it. Because, I want it to come true. Really, really want it to come true!

 

[TimmyB]

Here's an even more direct-to-the-point article about the possibility:

Could Hyundai?s Alabama Plant Expansion Be for Santa Cruz Production? | The News Wheel

 

[BahamaTodd]

Unfortunately, even if Santa Cruz has the green light, it takes 2-3 years to develop a vehicle on an existing platform. Unless they have already started working on it, we won't see the SC anywhere in the world until that time. Furthermore, even if they did start work somewhere else and went to production sooner, they couldn't import it here because of the "Chicken Tax" which is a 25% tax on all trucks imported into the US. (Canada and Mexico are exempt because of the NAFTA).

 

[TimmyB]

Unfortunately, even if Santa Cruz has the green light, it takes 2-3 years to develop a vehicle on an existing platform. Unless they have already started working on it, we won't see the SC anywhere in the world until that time. Furthermore, even if they did start work somewhere else and went to production sooner, they couldn't import it here because of the "Chicken Tax" which is a 25% tax on all trucks imported into the US. (Canada and Mexico are exempt because of the NAFTA).

I truly believe they are far along in this process. It would make NO sense to bring a vehicle this cool to NAIAS, get people all excited about it, then say, "OK, we'll be back in two years with it."

When I drilled the Hyundai reps about the new Tucson, they gave away NOTHING. They couldn't even confirm that the 2016 wasn't going to be the same platform as the 2010-2015 Tucson! And, yet, here it is, brand new from the ground up, going on sale this fall.

I am pretty sure that the SC is well underway, at least internally. They have to strike while the iron is hot, if they green-light it.

 

[BahamaTodd]

I also believe they are far along - far along enough to get it here in 2 years or so. If they were starting from scratch you're looking at 5+ years for development.

Once again, even if they are further along, it would be built overseas and we would not be able to get it because they wouldn't be able to import it. The US factories are already running well over capacity so there's no room for it here - until they build that plant expansion.

Never waste your time with automotive reps. They either don't know very much, or if they do, they're not going to give anything up unless they want to lose their job.

 

[TimmyB]

I also believe they are far along - far along enough to get it here in 2 years or so. If they were starting from scratch you're looking at 5+ years for development.

Once again, even if they are further along, it would be built overseas and we would not be able to get it because they wouldn't be able to import it. The US factories are already running well over capacity so there's no room for it here - until they build that plant expansion.

Never waste your time with automotive reps. They either don't know very much, or if they do, they're not going to give anything up unless they want to lose their job.

But, would it have to be classified as a "truck"? I don't believe my current Tucson is; it's a wagon, if I recall. (I don't have easy access to my title, but I'm pretty sure that's what it says.) If that's the case, they could avoid the 25% tax.

 

[BahamaTodd]

If it has an open bed, its a truck. Vans with open cargo areas also apply. Ford builds their Transit connect vans in Turkey and ships them here with cheap seats so it can be classified as a wagon. They then remove and recycle the seats. The only exception that ever got through is the Subaru Brat, and that's because they put those two seats in the bed. They later closed that loophole.

 

[TimmyB]

If it has an open bed, its a truck. Vans with open cargo areas also apply. Ford builds their Transit connect vans in Turkey and ships them here with cheap seats so it can be classified as a wagon. They then remove and recycle the seats. The only exception that ever got through is the Subaru Brat, and that's because they put those two seats in the bed. They later closed that loophole.

Well, so much for THAT!

 

[Santana]

That Subaru SL reminds me of our beloved El Camino

 

[Colin]

That Subaru is hilarious. It would probably be pretty fun to ride in the back in those seats though. It just doesn't look right htough.