(Reuters) - Hyundai Motor Co. and the state of Alabama will announce on Monday "additional investment in the existing infrastructure" at its auto assembly plant near Montgomery, the company said on Sunday.
A Hyundai spokesman, Robert Burns, declined to give specifics of the announcement that will be made at the Alabama capitol building in Montgomery, the state capital.
The announcement comes as Hyundai's U.S. sales are booming. The Korean company is the fastest growing major automaker in the U.S. market.
Its sales rose 31 percent in the first four months of 2011. The company is benefiting from a model lineup laden with fuel-efficient small cars as consumers seek vehicles that can help overcome gasoline prices that have risen above $4 per gallon over much of the United States.
Hyundai's U.S. chief executive, John Krafcik, earlier this year said the automaker's U.S. sales will be constrained by production limits, but has not commented on any plans to expand the company's U.S. production.
Sources told Reuters that Hyundai in recent months has spoken at least informally with at least three U.S. states, including Alabama, about plans for a second plant in the U.S. Southeast.
Officials in South Carolina and Mississippi expressed interest in luring the Korean automaker to place new production facilities in those states.
It was not known whether Monday's announcement is a prelude to a second factory near Hyundai's existing plant in Alabama. The company owns about 1,750 acres, and its current assembly plant takes up less than a third of that land.
Sources told Reuters that Hyundai is considering placing a second assembly plant on the same site as its existing one south of Montgomery.
One source told Reuters that any new plant would produce a subcompact car, the size of the Hyundai Accent which is now imported to the United States.
Hyundai's Alabama plant makes two of the hottest selling cars in the U.S. market, the midsize sedan Sonata and the redesigned small sedan Elantra.
The plant's assembly lines operate as much as 20 hours per day during weekdays and on some Saturdays trying to keep up with high demand for the Elantra and Sonata.
The Montgomery Advertiser in Alabama reported over the weekend that it is possible Hyundai may place a transmission plant in Alabama. Transmissions for the Elantra are shipped to the Montgomery plant now.
Hyundai opened its Alabama plant in 2005. It was followed by dozens of Korean auto parts suppliers that established parts plants in Alabama to serve the Hyundai factory.
Alabama is a "right to work" state, which helps companies located there fend off efforts to unionize workers.
The United Auto Workers, which represent production workers at the three major U.S. automakers, has not been successful in convincing Hyundai workers to unionize the Alabama plant, which has about 2,600 workers.
Mississippi and South Carolina are also right to work states.
Hyundai's U.S. April sales increased 40 percent from April 2010, to 61,754 units, for a 4.8 percent share of the U.S. market. Through April, Hyundai's U.S. sales rose 31 percent to 204,374 units.
U.S. sales of the Sonata were up 17 percent in April. And Sonata sales rose 46 percent to 73,616 in 2011 through April.
U.S. April sales of Elantra were up 129 percent and up 89 percent in 2011 through April.