SEOUL: Hyundai Motor Co has decided to build its second U.S. factory to meet demand for sport utility vehicles, South Korea's Yonhap News Agency reported on Wednesday, citing an industry source familiar with the matter.
The report came as Hyundai's U.S. executives have been clamoring for more production capacity for SUVs, whose demand is rising partly thanks to lower oil prices.
The new plant in Alabama would have an annual production capacity of 300,000 vehicles, Yonhap reported, noting it would break ground this year and start SUV production in 2017.
A Hyundai Motor spokesman said "there are no plans at this stage," without elaborating further.
U.S. sales of Hyundai, an outperformer during the 2009 global economic downturn, rose 4 percent from January to February, lagging the market's 9 percent growth.
The South Korean automaker is reliant on sales of sedans, which have slowed as U.S. consumers are shifting to SUVs - strongholds of U.S and Japanese rivals.
Hyundai Motor builds its Elantra compact and Sonata mid-sized sedan at its U.S. factory in Alabama and its Santa Fe SUV at affiliate Kia Motors' production facilities in Georgia.
Kia Motors plans to start production at its first Mexico plant in the first half of next year, to help ease capacity constraints at its U.S. factory.
Hyundai Motor will launch a revamped version of its Tucson SUV in Korea this month, followed by the United States and other countries, to revive growth in key markets.