en.Wedoany.com Reported - South Korea's Hyundai Motor is evaluating the possibility of building a vehicle manufacturing plant in Mexico, with a potential investment exceeding $2 billion and an annual production capacity planned between 250,000 and 300,000 units. The South Korean automaker stated that any final decision will depend on the upcoming review results of the United States-Mexico-Canada Agreement (USMCA) and the progress of a free trade agreement between Mexico and South Korea.
Edgar Carranza, CEO of Hyundai Motor Mexico, stated that these two developments would significantly strengthen the company's business case for expanding its manufacturing operations in the country. Carranza told El Sol de México that the company is interested in continuing to grow, but two major factors still need to be clarified: the outcome of USMCA negotiations and the progress of the bilateral trade agreement between South Korea and Mexico. If Mexico prevails under favorable terms in the USMCA and advances the trade agreement with South Korea, Hyundai will have a compelling scenario to expand its manufacturing investment in Mexico.
Mexico's Ministry of Economy announced in 2022 the launch of negotiations for a trade agreement between the two countries, built on 60 years of diplomatic relations. Although negotiations have not yet concluded, Hyundai considers progress on this issue a significant factor in its long-term investment strategy. Carranza noted that if these two factors align, additional manufacturing investment on top of the group's existing investments would be very attractive.
Hyundai Motor Group already has a significant presence in Mexico through its manufacturing, distribution, and supplier operations. The group has invested over $2.5 billion in Mexico and supports more than 12,500 direct jobs. The new assembly plant would represent the next phase of its expansion strategy. Carranza stated that a project of this scale would require at least $2 billion in investment, excluding capital expenditures from supporting suppliers, and would create hundreds of additional jobs throughout the supply chain.
Mexico is solidifying its position as a global automotive manufacturing hub, serving as an export platform to the United States and Canada under the USMCA. South Korean companies have become major players in Mexico's industrial sector. Hyundai and Kia operate alongside other South Korean manufacturers, including Samsung and LG, which have established production facilities across Mexico. In 2025, Hyundai and Kia sold a combined 165,669 vehicles in Mexico. According to data from Banco de México, Mexico's exports to South Korea reached $6.603 billion in 2025, up 7.1% year-over-year, while imports from South Korea totaled $23.07 billion, an increase of 0.3%. Bilateral trade relations have gained additional importance since Mexico imposed tariffs ranging from 5% to 50% on imports from countries without a free trade agreement, effective January 1, 2026.
The tariff changes have already posed challenges for Hyundai. The company has been forced to adjust its procurement strategy and production allocation to remain competitive. Carranza stated that the advantage of having multiple plants globally is that it gives the company flexibility to decide where to source vehicles and maintain competitiveness. He noted that Mexico's tariff increase raised the duty rate on approximately 8 out of every 10 vehicles Hyundai imports into Mexico from 20% to 50%, a significant impact that would consume more than half of last year's profits, but the company was able to maintain prices to stay competitive. Despite the pressure, Hyundai reported sales growth. According to data from Mexico's National Institute of Statistics and Geography (INEGI), Hyundai sold 21,454 vehicles in Mexico from January to May 2026, a 2.5% increase year-over-year. In May alone, Hyundai sold 4,652 vehicles, up 3% month-over-month. According to data from the Mexican Automotive Dealers Association (AMDA), the automaker ranked among Mexico's top ten automotive brands during this period, with a market share of 3.4%. Carranza stated that Mexico remains a strategic market due to its size and long-term growth potential, and over 90% of Hyundai's Mexican customers recommend the brand.
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