Top Hyundai Official Confirms Small Car for Kia Georgia Plant

SEOUL – Kia Motors Corp. will build a small car at its still-under-construction West Point, GA, plant, a top Hyundai Motor Co. Ltd. executive reveals here.

Hyundai Vice Chairman and CEO Kim Dong-jin declines to say what small car will be built at the greenfield plant, only that it likely will have a C-segment platform. He also suggests Kia’s U.S. plant could build a Hyundai-brand version of the car on the same platform.

Kim, who is a member of Hyundai’s South Korean governing board and involved with strategic discussions involving both Hyundai and its Kia affiliate, says there was interest in building a pickup truck at the Georgia plant, but high oil prices and the declining U.S. light-truck market have caused executives to change direction and opt for a small car.

Industry watchers have speculated the upcoming Soul cross/utility vehicle could be the second vehicle produced at the plant.

A Kia Motors America Inc. spokesman tells Ward’s production of the second-generation Sorrento SUV still is planned for Georgia, as previously announced, but declines to comment on a possible second model.

Kim also puts the official kibosh on Hyundai developing a separate luxury brand and dealer channel for its Genesis sedan and coupe anytime soon. The idea was the subject of huge debate within the company, he tells journalists here, with many insiders eager to take the Hyundai brand to a new level.

Kia Soul rumored to be second model for Georgia.

However, an extensive study by an outside consulting firm, as well as internal studies, shows such a venture would be too expensive for the limited number of cars involved, costing as much as $2.5 billion to fully establish a new brand and dealership channel over a period of 13 years or so.

Kim says other studies show the new Genesis will have a positive halo effect on the brand if sold through the current Hyundai dealer network.

Nevertheless, the CEO remains bullish about the auto maker’s technology and growth plans in the U.S.

The upcoming Hyundai Sonata hybrid-electric vehicle, due in late 2010, for instance, will feature purely Hyundai HEV technology, with no licensed hardware or software technology from other auto makers.

That’s due, in part, to the fact Toyota Motor Corp., Honda Motor Co. Ltd. and Nissan Motor Co. Ltd. refuse to license their technology to Hyundai because it is becoming too strong a competitor, he says.

The complex software algorithms necessary to make HEV powertrains operate smoothly frequently are considered the toughest part of the HEV riddle to solve.

However, Kim cites South Korea’s reputation as a global leader in information technology as reason for total confidence the auto maker has plenty of indigenous resources to draw upon for that piece of the hybrid puzzle.

And despite Hyundai’s failure to hit its sales targets in recent years and U.S., dealers’ complaints about faltering profitability, Kim says 40 more retailers will be added to the auto maker’s U.S. dealer body as early as this year in an effort to boost overall sales.

What’s more, he says Hyundai is expected to introduce about seven new vehicles by the end of 2010 in its bid to continue growing in the U.S.

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