Hyundai Motor expanding Alabama engine line as US sales rise

Bloomberg News - Hyundai Motor Co., South Korea's largest automaker, will spend $173 million and add 214 jobs at its Alabama plant to boost production of four-cylinder engines amid rising U.S. demand for its vehicles.

The 1.8-liter "Nu" engine will be built at the Montgomery factory starting in March 2012, Robert Burns, the plant's spokesman, said in a phone interview yesterday. The motors will be used in Elantra compact cars built in Montgomery, he said.

Hyundai is boosting U.S. output with overtime shifts to keep up with a 31 percent increase in sales in the nation through April. Seoul-based Hyundai has said it will build 330,000 vehicles this year in Alabama, 10 percent more than the plant's official capacity.

"They're working in a market that's growing, in which demand for their products is increasing," said Alan Baum of West Bloomfield, Michigan-based industry consultant Baum & Associates. "Given demand for Sonata, the Elantra, Santa Fe, there's probably demand for 200,000 more units than they can build now."

While Hyundai officials didn't discuss plans to boost U.S. auto-assembly capacity yesterday, such an announcement may come within months, Baum said.

The expansion and upgrades at Montgomery will also allow Hyundai to produce more 2.4-liter and 2.0-liter turbo engines for the Sonata sedans built at the plant and for models that affiliate Kia Motors Corp. makes in West Point, Georgia, Burns said. Kia, which makes Sorento and Hyundai Santa Fe sport- utility vehicles in Georgia, said last month it would start making Optima sedans at the factory late this year.

Hyundai's Montgomery factory stopped making V-6 engines in February, Burns said.

Hyundai gained 0.9 percent to 226,000 won at 9:02 a.m. in Korea Stock Exchange trading. The company's U.S. sales unit is based in Fountain Valley, California. Kia's U.S. sales unit is in Irvine, California.