Hyundai Motor has raised its 2030 target for locally sourced parts in North America to 80% from 60%. The company set the target at its CEO Investor Day last month, along with a plan to add 500,000 units of production capacity in the region by 2030.
Twenty points of that parts buy moves to suppliers with plants in the US, Canada or Mexico. A supplier shipping parts out of Korea has four years to put capacity in the region or bid for a smaller share of the program.
US sourcing for the Santa Fe and Tucson sold in the American market has already risen more than 10 percentage points, according to an investor-day slide deck cited by Supply Chain Dive. CEO José Muñoz said the company will expand its local supplier networks to “secure supply stability, reduce logistics costs and mitigate regulatory exposure.”
Hyundai will add 1.27 million units of capacity worldwide by 2030. The North American share includes a 200,000-unit expansion at the Metaplant in Georgia that the company announced earlier and has not installed. The region gets more than 10 hybrid models by 2030, built there and at the Alabama plant, with hybrids reaching half of regional sales.
Localization is the smallest of the three cost levers in the plan. Hyundai will cut its cost of sales by 3 percentage points as a share of revenue by 2030: 1.5 points from cost work across the vehicle lifecycle, 1 point from cheaper materials and 0.5 points from localization.
The US capped tariffs on South Korean goods at 15% last year, including cars and auto parts, retroactive to last November. Every component Hyundai ships from a Korean supplier into a US plant carries that duty. “Tariffs are helping accelerate our localization plan. That’s very, very simple,” Muñoz told CNBC.
USMCA now runs on annual reviews instead of a renewal. The US is pushing to raise the North American content requirement for vehicles to 82% from 75% and add a rule that 50% of a vehicle's content come from the US. Mexico opposes it.
Muñoz also told CNBC the company is weighing an increase at the Georgia plant to between 700,000 and 800,000 units by 2028, from 500,000.
