[Photo by Hyundai Motor Co.]

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South Korea’s top automaker Hyundai Motor Co. will invest an additional $300 million in its Alabama plant in the United States to produce its newly developed smart stream engines as demand for its cars in the country is on a steady rise.

According to multiple foreign media reports on Monday, Hyundai Motor plans to invest $292 million in Hyundai Motor Manufacturing Alabama (HMMA) from November this year to April next year to add a manufacturing facility to produce its new smart stream engines using the continuously variable valve duration (CVVD) technology. The additional spending comes about a year after Hyundai Motor invested $388 million to build an additional manufacturing facility for engine heads, whose construction was completed in May.

With the latest investment in its Montgomery plant in Alabama, Hyundai Motor’s investment into its U.S. facilities over a two-year period would hit a total $680 million. The Korean auto giant has decided to make such a bold investment in the world’s second-largest car market to bump up shipments of its vehicles to meet the growing demand for its cars – especially new sport utility vehicles and premium segment cars.

Hyundai Motor sold 65,494 cars including its premium luxury vehicle Genesis in the U.S. in August, up 13.8 percent from a year ago. The automaker has posted sales growth for 13 straight months since August last year thanks to the strong demand for SUVs such as Kona, Tucson, Santa Fe, and Palisade.

To further expand its market share in the U.S., the Korean auto maker plans to launch new vehicles fitted with its newest CVVD smart stream engine next year. Hyundai Motor already announced in July that it would produce its smart stream G1.6 T-GDi engine using CVVD technology at its Alabama manufacturing plant.

[Photo by Hyundai Motor Co.]

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CVVD technology can improve performance by more than 4 percent compared to existing engine and fuel efficiency more than 5 percent, according to the company. Currently, the newly developed engine is produced only at Hyundai Motor’s Ulsan plant and its sister company Kia Motors Corp.’s Hwaseong plant. Once the new engines are manufactured at Hyundai Motor’s Alabama plant, they will be applied to U.S. models Sonata Turbo, Santa Fe, and Elantra, known as Avante in Korea.

Hyundai Motor’s latest investment plan is also expected to have a positive influence on the Donald Trump administration’s final decision on imposing auto tariffs under Sector 232 of the Trade Expansion Act that could come as early as November. More investment in the U.S. plant and additional hiring of workers may help Hyundai Motor build a case for exemption from higher tariffs.

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