Hyundai is planning to build its second factory in Alabama, US to increase the production of SUVs in the country, reported Yonhap News Agency.
The move is reportedly triggered following a drop in gas prices in the US, which has increased the demand for gas-powered trucks.
The new plant is expected to have an annual production capacity of 300,000 vehicles and the groundbreaking ceremony is expected to be held this year, with production commencing in 2017.
The Alabama factory is currently responsible for building Elantra compact and Sonata mid-sized sedans, and demand for both the vehicles have reportedly reduced in the US.
Reuters cited sources familiar with the matter as saying that the decision to build the new facility has been made to keep up with the demand for SUVs in the US.
The publication also cited another source as saying: "It's a new assembly line right next to the current Alabama line. State of Alabama is negotiating final terms."
According to Korea Investment & Securities auto analyst Suh Sung-moon the company is also likely to transfer the production of Santa Fe production to Alabama, and could start producing Tucson along with a pick-up truck.
Image: Hyundai manufacturing plant in Ulsan, South Korea. Photo : Courtesy of Taneli Rajala/ Wikipedia
