Korea Herald Correspondent
MONTGOMERY, Alabama - Hyundai Motor Co. opened its first U.S. production plant yesterday in the capital of Alabama state.
The $1.1-billion won factory, the first to be set up in the world`s biggest car market by a Korean automaker, is part of Hyundai`s plan to localize its research & development, production and sales, the company said.
Hyundai Alabama Manufacturing Motor plans to annually roll out 300,000 units of Hyundai`s flagship Sonata sedan and a successor to its Santa Fe sport-utility vehicle , starting next year.
"This new manufacturing facility reaffirms our commitment toward investing in the U.S. economy as well as its commitment toward U.S. consumers," said Hyundai Motor Chairman Chung Mong-koo at the opening ceremony.
"American consumers have recognized Hyundai`s quality, and this plant will enable us to better serve them."
The plant is a major step in Hyundai`s ambition to become a top five automaker in the world by 2010.
Hyundai, the seventh-largest seller of vehicles in the United States, is following the strategy of Toyota Motor Corp. and Honda Motor Co. of building cars in its overseas markets.
With costs and sales in U.S. dollars, Hyundai, Korea`s No. 1 automaker, will be able to buffer itself from the strengthening Korean won, which slashed first-quarter earnings by 30 percent to 322.7 billion won ($322 million) as it diminished the value of exports.
Hyundai sold 418,615 vehicles in the United States last year, year, accounting for 18 percent of its world sales. It hopes to sell 490,000 units this year, including more than 100,000 from the Alabama plant.
At the opening ceremony, new Sonatas were on display for 4,000 guests from the political and business sectors, including Alabama Gov. Bob Riley, employees of Hyundai, its partners and U.S. car dealers.
"For the past three years, Hyundai has been a great neighbor here in the state of Alabama. I speak for every resident in the state when I say that we are proud to have Hyundai in Montgomery and we are even more proud to play a role in the company`s growth here in the U.S. and throughout the world," said Riley.
Alabama and the municipal government of Montgomery have made direct and indirect investment worth $250 million for the plant.
In addition to building a road named after the company and providing the land for free, they paid the expenses for the training of 2,000 workers in Korea..
Alabama also has a Mercedes-Benz factory in the city of Vance, which has an annual production capacity of 80,000 cars.
"The state and municipal governments offered Hyundai a great deal of support as the Mercedes-Benz plant set a good example by creating around 84,000 jobs," Elton Dean, a Montgomery county commissioner, told The Korea Herald.
Through the U.S. facility, Hyundai aims to establish a total "Made in U.S.A" system where a car`s entire life cycle -development, production, marketing, sales, after-market service - is localized so that they can respond more quickly to consumers` needs here.
Also, cars made by American hands will appeal to the consumers` "buy America" sentiment currently on the rise, according to the company.
The carmaker will be able to adopt advanced technologies of American parts makers, with 34 suppliers supporting the new plant..
The suppliers are expected to create 4,000 additional jobs with a combined capital investment of $500 million.
Eleven Korean automotive components makers have also joined Hyundai Motor by establishing their manufacturing units here.
The 2,000 employees, all from Alabama, receive $14.22 per hour and can choose whether or not to get medical insurance. Hyundai said it plans to increase the hourly pay up to $22.
The Alabama plant, Hyundai`s most advanced production site to date, began production in May, with its first 2006 Sonata, which is priced between $17,895 and $22,895.
The Sonata received the highest points in J. D. Power & Associates` initial quality study last year.
"Hyundai has become a true global automaker by offering models that satisfy consumers not just in he U.S. but all over the world," said J. D. Power III, founder and chairman of the global marketing information provider named after him.
Hyundai is rivaling Japanese carmakers in terms of quality, although it still lacks brand value compared to them, according to Power, who attended the dinner hosted by Chairman Chung on the eve of the opening ceremony.
Since its initial export of the Excel compact to the United States in 1986, Hyundai has sold almost 4 million cars in the country.
Hyundai`s first North American assembly plant. in Quebec, Canada. was closed in 1996 because of weak sales. Hyundair sold 90,217 vehicles in the United States then, according to data from Automotive News, a trade publication.
(sophie@heraldcorp.com)






By Kim So-hyun