For Hyundai, the decision will soon be when to add more production capacity to North America. It takes a couple years to get a new plant up and running. Hyundai has been emphatic in stating that its focus right now is on maintaining quality and not expanding production. Fair enough. The Korean automaker does not want to make the same mistake Toyota made a decade ago of expanding so aggressively that its quality slipped. (Read More: Consumer Reports Says Ford Touch-Screen System "Stinks")
That said, make no mistake about the importance of the visit to the U.S. this week by Hyundai’s chairman Chung Mong-koo. He is meeting with executives at Hyundai’s U.S. headquarters and will visit the Hyundai Plant in Alabama and Kia plant in Georgia. Officially, Hyundai says its chairman is not in the U.S. to discuss future expansion plans here. When I talked with auto industry veterans who have worked with automakers as they added or expanded plants, all of them said the same thing: Expansion is on the radar for Hyundai.
In July the U.S. passed South Korea to become the second largest market in the world for Hyundai. China is still number one and will be for the foreseeable future. It is here in the U.S. where Hyundai faces some tough choices. There are reports in Korea that Hyundai’s Chairman will be discussing Hyundai’s “lackluster” sales in the U.S. The reports all gloss over the fact that Hyundai’s growth here is, to a large extent, constrained by capacity.
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