Bullish indicating open at $55-$60, IPO prices at $37
Investing.com-- Shares of Hyundai (OTC:HYMTF) Motor (KS:005380) rallied in Seoul trade on Tuesday after the South Korean carmaker, along with U.S. President Donald Trump, announced a $21 billion investment in the U.S.
Shares of the automaker jumped as much as 7.5% to 229,000 won, helping spur a 0.3% rise in the KOSPI index.
Hyundai said it will invest about $9 billion by 2028 to boost production capacity in the U.S. to 1.2 million vehicles, and $6 billion to expand partnerships with U.S. companies. Additionally, Hyundai Steel (KS:004020) will invest $5.8 billion to build a new plant in Louisiana that is projected to produce over 2.7 million metric tons of steel per year.
The move comes as Hyundai seeks to appease the Trump administration and potentially gain some relief from the 47th President’s plans for steep trade tariffs. The automaker’s investment in the U.S. is also in line with Trump’s agenda of bringing more businesses to the U.S.
Hyundai- the world’s third-largest automaker by sales- stands to be directly impacted by Trump’s proposed automobile tariffs, which would likely weigh on its U.S. sales. Trump’s planned reciprocal tariffs against South Korea will add to this impact.
But the company can duck Trump’s tariffs by increasing its U.S. production. Hyundai currently has two factories in the U.S.- in Alabama and Georgia- with a combined annual capacity of 1 million vehicles.