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Hyundai Solving Production Limit Problem by Adding Mexico Factory

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Car Factory Assembly Plant Mexico Hyundai plans

Hyundai is planning on expanding its assembly operations with a new factory in Mexico

Hyundai Global executives in the automaker’s home country of Japan have been repeatedly urging its Western branches to address concerns about slowing growth rates. Their advice has been to expand production capacity and consequently allow more room for financial growth. Now, it appears Hyundai Motors will be making such a move.

According to an interview by Bloomberg with the managing director of Hyundai Motor de Mexico, Hyundai will be solving its production limitation issue by adding a new factory in Mexico. Clearly this decision supports the idea that Mexico’s role in the global auto industry is increasing.

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Hyundai’s Plans to Expand Production to Mexico

The factory planned for Mexico won’t be built until domestic sales in the country hit a threshold and maintain a steady growth rate. The magic number to reach is 50,000 annual sales.

“Hyundai wants to turn Mexico into a very important base for its global production,” Pedro Albarran, managing director for Hyundai Motor de Mexico, stated. “I’m sure that over the years we’ll see production of Hyundai products in Mexico.” He speculated the goal could be met as early as 2018, though domestic sales in 2014 only totalled 12,000.

Apparently, this move is inspired by the decisions of Kia, Nissan, BMW, GM, Toyota, and Mazda to begin production in Mexico, which has already brought in suppliers Hyundai would need to also manufacture in the country.

Due to Mexico’s proximity, it’s not unreasonable to speculate that some of the plant’s stock would be exported to nearby America where the automaker is in need of more vehicles to sell. Estimates are the factory would produce more than 100,000 vehicles each year, many of them being subcompact models popular in Mexico. What else would be produced in Mexico and where it would be exported has yet to be seen.

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News Source: Bloomberg