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US: Kia to build Hyundai Santa Fe with Sorrento

By just-auto.com editorial team | 1 September 2010

Hyundai Motor, which has been gaining market share in the US, is moving production of its Santa Fe SUV from its Alabama plant to the new Kia plant in Georgia, a Hyundai spokesman said.

The move is intended to help fill affiliate Kia's new plant and give Hyundai more capacity to make its Sonata sedan in Alabama, the Wall Street Journal reported.

Santa Fe production will begin sometime this autumn at the West Point, Georgia, plant that opened in February and now makes the Kia Sorrento. The move will free up nearly 100,000 units of capacity at Hyundai's Montgomery, Alabama plant to build Sonata sedans, which are selling rapidly, said company spokesman Chris Hosford.

Hyundai's US market share has risen from 3% at the end of 2008 to 4.7% to the end of July of this year and it was one of only three automakers - along with Kia - to post a sales increase in 2009 as the US auto market collapsed.

Hyundai was at full capacity at its plant in Montgomery. John Krafcik, the chief executive of Hyundai's US operations, said sales of the Sonata, which was redesigned this year, are being held back by lack of supply. Sonata sales are up 45% this year through July.

Krafcik estimated in an interview last week that Hyundai is likely to need to increase its annual production of Sonatas and other models by 100,000 vehicles within two years, due to rising demand for the car and the slow, steady recovery of US auto sales.

The Kia plant was built with the ability to make 300,000 cars a year and makes only the Sorrento, which is based on the same basic components as Hyundai's Santa Fe SUV. After production of the Santa Fe begins, the plant will still have excess capacity but there are no announced plans at this point to add other Kia or Hyundai production lines at the plant.

Hyundai and Kia also share production at their two plants in Slovakia and Czech Republic, in eastern Europe.