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Hyundai Motor Co. is pivoting its production strategy, prioritizing its in-demand SUVs, Tucson and Palisade, in South Korea. This decision responds to growing global demand while adjusting to the waning interest in sedans.
According to Hyundai officials, the renowned South Korean carmaker anticipates a sustained yearly shortage of approximately 100,000 units for the compact SUV Tucson and the flagship SUV Palisade.
To cater to the strong demand in North America, Hyundai initially considered bolstering production at its U.S. plant in Alabama or establishing a new factory in Canada. However, the company has now chosen to repurpose some production lines dedicated to sedans at its major plants in Ulsan, South Gyeongsang Province, including those meant for its premium brand Genesis.
Notably, Hyundai plans to increase the production of Tucson models by approximately 60,000 units and Palisade models by about 20,000 units next year. The Tucson SUV has attained immense popularity in the global market, with sales totaling 175,000 units in the U.S. alone in 2022, surpassing domestic sales of 33,000 units. As a result, Tucson is expected to face an annual shortage of around 12,000 units.
Currently, Tucson is manufactured at the second line of Hyundai's fifth Ulsan plant. To accommodate additional production, Hyundai will transform the third plant to produce around 50,000 units of the SUV annually. The third plant, which is currently dedicated to sedans like the compact Avante and the small sedan i30, will cease i30 production as a result.
On the other hand, Hyundai manufactures the Palisade exclusively in South Korea. The second Ulsan plant is specifically designed to assemble this mid-size SUV.
To tackle the growing demand for the Palisade, Hyundai will produce an additional 30,000 units at the first production line of the fifth plant, previously dedicated to the sedans under its premium brand Genesis but now left redundant due to lack of demand. As a result, Palisade is projected to face a shortage of up to 90,000 units annually.
In other news, in a show of support for the U.S. island of Maui in Hawaii, which recently suffered from a devastating wildfire, Hyundai Motor and Kia have jointly decided to donate $300,000. Additionally, the companies have announced plans to provide discounts and other financial assistance to individuals affected by the disaster.
Overall, Hyundai's strategic adjustments to its production lines demonstrate its commitment to meeting the evolving demands of the market, underscoring its dedication to delivering high-quality vehicles that cater to the needs and preferences of customers worldwide.
Photo: Hyundai Motor Group/Unsplash
