Hyundai Motor to begin work on 2nd U.S. plant this year

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. (Yonhap)