Locations -- Montgomery, Ala.

Dec. 21, 2004
Hyundai Motor Co.'s first assembly and manufacturing plant in the U.S. will produce 300,000 vehicles per year when it reaches full capacity.
Plant Hyundai Motor Co., South Korea's largest automotive producer, is building a US$1 billion assembly and manufacturing plant in Montgomery, Ala. Production at the facility, Hyundai's first assembly and manufacturing plant in the U.S., is slated to begin in 2005. The plant is expected to produce 300,000 vehicles per year when it reaches full capacity, with sedans and sport-utility vehicles comprising the product mix. Groundbreaking for the facility, which the company figures will create about 2,000 jobs, took place on April 16. The site is now in unincorporated Hope Hull, Ala., and is slated to be incorporated into Montgomery. The new Hyundai plant will not be Alabama's only automotive facility, however. In August 2000, DaimlerChrysler AG announced a $600 million investment to expand production capacity at its Tuscaloosa site for sport-utility vehicles. And last year, Toyota Motor Corp. announced plans to build a $220 million engine plant in the Huntsville area. Corporate Strategy Hyundai's decision to build a plant in Montgomery was based in large part on the automaker's continued strong sales and market-share showing in the U.S. Last year, the Hyundai Automotive Group -- Hyundai Motor America and Kia Motor America in the U.S. -- sold 569,956 units, a 29% increase over 2000 sales. Also factoring into Hyundai's selection of Montgomery were the presence of a high-quality workforce, proximity to markets, an established automotive parts supply chain, and commitments made by the state of Alabama and the city of Montgomery. This past March, the Alabama legislature approved a $118 million incentives package in hopes of attracting Hyundai. State and local incentives, approved or agreed upon, total $234 million. "Our decision to build this facility in Montgomery, Ala., underscores our commitment to the U.S. market," says Mong Koo Chung, chairman of the Hyundai Automotive Group. Production Strategy Hyundai's choice of Montgomery for a production facility seems to be a classic illustration of applying the strategic principle of being close to customers. For Hyundai, that translates to selecting a site allowing it to better meet demand and accelerate delivery. "Our new plant will allow us to build more vehicles for this growing market and get them to our customers more quickly while continuing to produce the high-quality, well-styled, high-value products that our customers have learned to expect from Hyundai," asserts Chung. Community Montgomery, the capital of Alabama, is home to a campus of Auburn University and to the anti-discrimination Southern Poverty Law Center. Montgomery has a fairly diversified manufacturing base, from food and furniture to software engineering. There's a growing IT industry, with 125 companies located in Montgomery. Population of the city is 201,568, and the Montgomery metro area totals 333,055. Locations profiles selected siting and facility strategies by manufacturing companies. Send submissions to Senior Editor John S. McClenahen at [email protected].

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