BIRMINGHAM, Ala. - Hyundai Motor Co.'s $1 billion construction project in Montgomery, Ala., is just one element in a larger plan to become the world's fifth largest automaker by the end of this decade.
The project will give Hyundai 300,000 U.S.-made vehicles annually starting in 2005. But Byung Mo Ahn, executive vice president of Hyundai Motor Manufacturing Alabama LLC, suggested that the plant is a stepping stone to Hyundai's bigger goal.
"We have more ambitious goals," Ahn said at last week's Automotive News Manufacturing Conference here. "By 2010, we plan to reach an annual worldwide production of 5 million cars and trucks."
That figure would include production by affiliate Kia Motors Corp., in which Hyundai holds a 60 percent stake, directly and indirectly. Including Kia, the company was the world's seventh largest producer last year on output of 2.9 million light vehicles, up 16 percent over a year earlier.
Hitting that target will require the Korean producer to expand overseas manufacturing. Ahn said Hyundai expects 1.5 million units of its 5 million total to come from non-Korean factories in 2010.
Last year, Hyundai had the capacity to build only about 500,000 vehicles outside Korea, spread among 15 plants in 11 countries. That means the company will have to boost overseas production by 1 million units in the next seven years.
"When we began planning for this project, we felt that Hyundai sales in North America would continue to grow," Ahn said. "Many people outside Hyundai did not believe our North American sales would expand as quickly as they have. Yet today, we are the fourth largest import auto company in North America."
The Alabama project is larger than most transplant startups. In the past, non-U.S. automakers have tended to launch single production lines, adding more capacity only as the parent companies gain confidence in the new operations.
Hyundai plans to launch two models simultaneously in Alabama - the Sonata and the Santa Fe SUV. The company has hinted strongly that other models will follow, even vehicles that are new to the U.S. market.
Ahn said the Montgomery site is 1,750 acres, or nearly twice the size of a plot normally required for a full-scale auto assembly plant. A Kia plant also is considered a possibility for the site.