Hyundai investing $290M to upgrade Alabama assembly plant

Hyundai Motor Group is investing $290 million to upgrade its assembly plant in Montgomery, Alabama, the automaker announced last week.

Subsidiary Hyundai Motor Manufacturing Alabama will invest $190 million to upgrade and retool the plant to build the fifth generation of Hyundai’s Santa Fe sport utility vehicle, CEO and President Ernie Kim said.

The remaining $100 million will be invested to increase production of Hyundai’s Tucson SUV and Santa Cruz Sport Adventure Vehicle, Scott Posey, public relations manager for Hyundai Motor Manufacturing Alabama, told Manufacturing Dive in an email.

The equipment upgrades are projected to be complete by Q4 of this year, Posey said, with production of the new Santa Fe model beginning in December 2023 or January 2024. The vehicle is scheduled for a North American release in the first half of 2024.

Hyundai Motor Co. debuted the new Santa Fe model earlier this month, the SUV’s first full model change since 2018. The updated vehicle will have an enlarged tailgate and cabin, an interior with sustainable materials and various high-tech features including a 12.3-inch Panoramic curved display.

The vehicle will also be available in two power systems in North America: a gasoline 2.5-liter turbocharged engine and a gasoline 1.6-liter turbocharged hybrid.

While the new investments at the Montgomery site are focused on gas-powered vehicles, the automaker has also invested in EV-related upgrades at the facility. Last year, the automaker invested $300 million to upgrade assembly processes to support the production of its luxury brand Genesis SUV the Electrified Genesis GV70 and its hybrid version of the Santa Fe.

The facility launched production of Genesis’ Electrified GV70 SUV in February, making it the first model to be assembled in the U.S. Hyundai committed to launching new Genesis models as all-electric starting in 2025, with a goal to have an all-electric lineup by 2030.

Hyundai has been investing heavily in the southeastern U.S. region. The South Korea-based automaker announced it was investing $5.5 billion to build an EV manufacturing campus in Ellabell, Georgia, last May.

Hyundai also launched a joint venture with LG Energy Solution in May to build a $4.3 billion battery cell plant, which will be adjacent to the upcoming manufacturing site.

The auto giant has also drawn its suppliers to establish or expand facilities in the region to support vehicle production. Auto parts maker Shinhwa Auto USA is investing $114 million to expand its manufacturing operations in Auburn, Alabama. The company has been making parts for Hyundai’s Montgomery assembly plant and Kia’s assembly plant in West Point, Georgia, since it opened its first facility in 2020.

Since Hyundai broke ground on its metacampus in October, 10 suppliers have established a manufacturing footprint in Georgia.

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