Hyundai Motor Co. may build a factory in Mexico once the company’s domestic auto sales rise, joining affiliate Kia Motors Corp. in Latin America’s top vehicle-producing market, a top Mexican executive said Tuesday.
“Hyundai wants to turn Mexico into a very important base for its global production,” Pedro Albarran, managing director for Hyundai Motor de Mexico, said Tuesday in an interview with Bloomberg in his Mexico City office. “I’m sure that over the years we’ll see production of Hyundai products in Mexico.”
South Korea’s biggest automaker probably will wait until annual domestic sales exceed 50,000 before opening a plant, Albarran said. Hyundai began Mexico sales in 2014 with 12,000 vehicles and projects topping 50,000 by 2018. Albarran didn’t rule out an announcement before then.
The remarks by Albarran, who oversees sales and marketing but not manufacturing, were swiftly disputed by Hyundai Motor Co., which released a statement Wednesday from its office in Fountain Valley, Calif., saying it “does not have any plan of building a factory in Mexico.”
Talk of a Mexican factory comes at a sensitive time for Hyundai, which is believed to be seeking government incentives to expand its only North American assembly plant, in Montgomery, Ala.
Yonhap, the Korean news agency, reported in March that Hyundai is considering a second assembly plant on the Montgomery site with capacity to build 300,000 vehicles per year. It would start building SUVs in 2017, Yonhap reported. At the time, Hyundai said there were “no plans at this stage” to expand the U.S. factory.
A local assembly line would add Hyundai to the roster of global car brands setting up shop in Mexico. Hyundai has been mulling a plant in Mexico for several years, dating back to a report in 2007.
Toyota Motor Corp. said Wednesday it will open its first passenger-car factory in Mexico as the automaker ends a freeze on new assembly plants.
Separately, Ford Motor Co. on Friday is expected to announce combined investments of $2.5 billion in engine and transmission operations in Mexico, Reuters reported today.
Kia’s announcement last year followed pledges by BMW AG for a new factory and Daimler AG and Nissan Motor Co. for a joint operation. Nissan, Honda Motor Co. and Mazda Motor Corp. have all begun making autos in Mexico since November 2013.
Albarran said the state of Nuevo Leon would be a good location for Hyundai after Kia announced last year its first Mexico factory there for more than $1 billion. He said a Mexico factory probably would build more than 100,000 vehicles a year, including subcompact models popular in Mexico.
Kia’s decision to produce in Mexico has made the country more attractive for Hyundai by attracting suppliers, Albarran said.
“Hyundai has very important plans for Mexico,” Albarran said.
Gabe Nelson and Bloomberg contributed to this report.
