Hyundai Opens First U.S. Plant in Montgomery, Alabama

Why Alabama? The state's workers will work for less than those in Detroit, at an average of $29 per hour compared to $38, one

Alabama's workers will assemble new Sonatas and Santa Fes (shown) for less than those in Detroit, at an average of $29 per hour compared to $38. (Photo: Trevor Hofmann, Canadian Auto Press)

of the reasons Honda and Mercedes-Benz have built assembly plants there.

"The localization will clearly make up for our weakest spot on the currency. But we have a potential risks as well," commented David Kim, a senior Hyundai official. "We are not greatly experienced in running day-to-day operations overseas so fostering favourable relations between management and workers is pivotal at the moment."

Hyundai's global sales increased by 14 percent last month, compared to April of 2004, bolstered by improved sales in China, India, Russia and other jurisdictions.

In the U.S. Hyundai enjoys 2.6 percent of the market, outselling many automakers

In the U.S. Hyundai enjoys 2.6 percent of the market, outselling many automakers that have been available for much longer, such as Volkswagen, Mazda and Mitsubishi. (Photo: Trevor Hofmann, Canadian Auto Press)

that have been available for much longer, such as Volkswagen, Mazda and Mitsubishi.

Like Volkswagen, Hyundai has plans to move up market by introducing new rear-wheel drive models within the next two years. It is unknown, however, whether the new luxury vehicles will be branded with the automaker's stylized "H" or receive an entirely new nameplate, similar to Toyota's Lexus brand and Nissan's Infiniti. One thing that is expected, mind you, is a much more competitive price point in comparison to Japanese and German premium products, in keeping with Hyundai's value proposition which has been a key ingredient to its stellar sales.