Being a relative latecomer to the US market, Hyundai does not have as large a US manufacturing base as the older Japanese brands, that were here for the 1980s “voluntary import restraints”. Something like half of the Hyundai, Kia, and Genesis models they sell here are still imported from South Korea.
The company to announce $20B investment in the US. $5B of that is for a new steel mill. That isn’t unusual for Hyundai. They own their own steel company in South Korea and make most of the steel used in their cars in house. That was something Henry Ford did, to better control quality and cost. The Rouge complex included it’s own steel mill, with ore brought down from Minnesota in Ford owned ships, that steamed up the Rouge River and berthed at the plant.
I had been thinking Hyundai would be a candidate to buy the US operations of the debt hobbled Nissan, to have instant in-country capacity. Building new plants will take longer.
They will be able to site them better and incorporate lowest-cost long-term production planning vs quarterly nonsense demanded by obsessed Wall Street.
The automaker and its group firms have about $1.6 billion of debt due next year, a slight decrease from 2024, but that figure will jump to around $5.6 billion in 2026, the most in Bloomberg-compiled data going back to 1996. The debt due in 2026 is in yen, dollars and euros.
Feb 2025:
TOKYO, Feb 21 (Reuters) - Moody’s Ratings said on Friday it has downgraded its rating of Nissan Motor’s credit by one notch to junk status, citing a weak and worsening outlook for the Japanese automaker’s credit profile.
MITI tried to arrange a merger between Honda, Nissan, and Mitsubishi, so Honda’s checkbook could make the Nissan and Mitsu paper good. The merger fell apart when Honda demanded the Nissan CEO leave town, and he refused.
Also Feb 2025:
In TIG speak, Nissan 'has no cards", but MITI probably doesn’t want all of Nissan in the hands of gaijin. Honda was the only Japanese prospect, with a fat enough checkbook, as Toyota is already so big. That is why I think select Nissan assets outside of Japan might be in play.
Not that anyone is reporting it, but these plans have been in the works since, and was initiated in 2019 with Hyundai’s first go round in setting up a factory in Georgia, with an also publicly announced intention to buy a small steel mill to produce a core product for themselves, as they do with their Korean plants.
The plant was set up and began producing (well, assembling) automobiles in 2023, and the intention was always to go bigger (as their success in penetrating the US market grew) and this recent announcement is merely confirmation of that intention. (My ‘24 Ionic 6 was merely “assembled” in Georgia with Korean made components, so it was not eligible for the $7500 rebate. That’s how I know. Some ‘25 models will qualify.)
It was announced now to get ahead of the April 2 announcement on tariffs, and to curry favor with the new administration. That doesn’t mean it was a decision taken lightly or simply as a political talking point, but the timing was accelerated to score points in Washington.