Hyundai builds up plant to get bigger sales

March 29, 2021 12:00 AM

Hyundai’s Alabama plant added production of the Tucson compact crossover in February. It will also produce the Santa Cruz pickup this year.

Despite a nearly 10 percent sales dip last year due to plunging fleet demand, Hyundai Motor America is sticking to its goal of 1 million U.S. deliveries by 2025. But getting there has manufacturing implications. The automaker has been beefing up its lone U.S. factory to make bigger sales possible once the pandemic fades.

In February, Hyundai Motor Manufacturing Alabama in Montgomery added production of the fourth-generation Tucson compact crossover, marking the first time the brand's bestselling global vehicle has been assembled in the U.S.

Launching the 2022 Tucson from Alabama during the pandemic is a big step for the automaker, which now builds four vehicles on the same assembly line. Hyundai Alabama said it expects to make 100,000 units of the gasoline-engine Tucson this year. A new hybrid version will come from Korea.

"The addition of the Tucson will further enhance HMMA's ability to adjust its vehicle production with market demand and stay competitive in the ever-changing automotive market," the company said in a statement.

The redesigned Tucson has been stretched to better compete in size and utility with market leaders such as the Toyota RAV4 and Honda CR-V. As such, the U.S. launch brings high expectations for sales and quality.

Hyundai "brought Tucson production to the U.S. because we have proven our ability to build world-class automobiles," Ernie Kim, president of the Alabama manufacturing unit, said in the statement.

The plant also makes the Santa Fe midsize crossover, the Elantra compact sedan, the Sonata midsize sedan and gasoline engines for all of the vehicles made there.

Zoom in: Hyundai tackles a more complex factory

Hyundai has big growth goals for U.S. sales. But reaching them means adding products to its factory mix and increasing complexity. Chris Susock, vice president for production at Hyundai Motor Manufacturing Alabama, spoke with Staff Reporter Laurence Iliff about the growing complexity.

Q: What are the challenges of adding the Tucson to a factory that already makes three different models?
A: Preparing our assembly lines to effectively manage the sequencing of parts and confirming the job allocations for each workstation to efficiently and safely build a quality vehicle.

How will the introduction of the Santa Cruz pickup further expand operations?
Hyundai spent more than $400 million to prepare our facility for the launch of the Santa Cruz. This included additional warehouse space for parts consolidation and an expansion of our weld shop to support our multivehicle production strategy.

Did Hyundai have any trouble finding additional workers?
We have been successful in hiring team members to support our operations. Since the COVID-19 pandemic, it has been challenging to recruit new additional workers.

Expanding North American capacity will help Hyundai capitalize on the industry's crossover sales boom.

"Adding this fourth Hyundai vehicle to [Alabama's] production lineup will help the Hyundai brand meet the growing demand for SUVs in the North American market," said Jose Muñoz, CEO of Hyundai Motor North America. "It will also better position HMMA to fully utilize its vehicle assembly capacity."

But the Tucson is not the only model being added in Montgomery this year. The plant is gearing up to also build the Santa Cruz lifestyle pickup, which shares a platform with the Tucson. The pickup, due in dealerships by late summer, is expected to provide a jolt to the automaker's image among younger buyers.

The Santa Cruz will mark the brand's first move into the small pickup segment. Making that entrance required Hyundai to invest more than $400 million in the plant for additional stamping, welding and warehouse space for parts processing.

Plant capacity, including Saturday production, is about 400,000 vehicles per year, Chris Susock, vice president of Alabama production, told Automotive News. But there is not a great deal of extra room for the future: Production is already expected to hit 350,000 this year as the Tucson and Santa Cruz ramp up.

Expanding the plant, while maintaining coronavirus safety protocols, was a challenge.

"It required us to evaluate every aspect of our production and assembly processes to adapt to COVID-19 safety protocols to protect our team members," Susock said in an email. "These extraordinary efforts allowed HMMA to reopen and remain open since May 2020" following the U.S. lockdown a year ago.