Hyundai Motor America considers second production plant

Hyundai is considering a second assembly plant in the U.S as its growth is being controlled by low production capabilities.

At the Detroit auto show, Hyundai Motor America CEO, John Krafcik revealed that Hyundai was going to make a decision on it based on the performance in 2011. Currently, Hyundai’s assembly plant is located in Montgomery, Alabama and it has been involved in producing the Sonata and the redesigned Elantra car.

The demand for both these cars in the market is quite strong. Hyundai’s sales head, Dave Zuchowski stated that Hyundai was afraid that it might not have sufficient products to meet the demand next year. While another plant is in the planning, no concrete plans have been drawn up for a second assembly plant in the U.S.

He suggested that it might be considered in the near future as Hyundai Motors has always invested in production when the sales are high. With a rise of 24 percent from 2009, Hyundai was able to sell a grand total of 540,000 vehicles in the United States alone in 2010. Of this grand total, a massive 200,000 included are new Sonatas.

While production capacity will be able to cater to less than 600,000 vehicles, the actual sales are expected to rise much higher in 2011. With the kind of global capacity currently present, Hyundai has a tough task ahead to cope up in terms of the production with the wild increase in the market share.

The automaker has been capturing a massive market share since the last two years. Krafcik informed that the assembly plant in Alabama is running full time on two 10-hour shifts and weekend shifts too whenever it can.

In 2010, the Alabama plant at full capacity was able to produce 300,500 vehicles. In order to build more Sonatas in the assembly plant at Alabama, Hyundai moved production of the Santa Fe SUV to Kia’s manufacturing plant in West Point, Georgia.

The Alabama plant was producing around 16,600 Sonatas per month when the Santa Fe was also being produced in the same plant. After the move to Kia’s plant, 25,600 Sonata Sedans were being produced. However, as Hyundai escalated Elantra’s production, Sonata’s production figures have come down to 17,829.

Hyundai still has been unable to meet the requirements, according to Zuchowski. It is expected that the sales of 2011 Hyundai Elantra will be even hotter than that of the Sonata and meeting demands for both will be extremely difficult. Though Hyundai was able to handle a crisis in the past, it is having a tough time handling this enormous success. In the current scenario, Hyundai wouldn’t mind a more stable market share that doesn’t pressurize its production facilities, Zuchowski concludes.