Hyundai halts U.S. pickup truck plan on oil prices
SEOUL (Reuters) - Hyundai Motor Group, the world's sixth-largest automaker, said on Friday it had shelved plans to produce a pickup truck in the United States amid concerns surging oil prices will hit demand for gas-guzzling vehicles.
Hyundai Motor Group had planned to produce mid-sized trucks at subsidiary Kia Motors Corp's <000270.KS> new factory in Georgia to make inroads to the world's top pickup truck market.
"We have an interest, but because of high oil prices, the light truck market has been declining. We don't think it's the right time to produce (the truck); it's not the right economic environment," Kim Dong-jin, Hyundai's vice chairman, was quoted as saying by a company spokeswoman.
"Kia is well-adapted to make the pickup truck and so we investigated the possibility while building the Georgia plant. However, with this economic environment, we were forced to give up these plans," said Kim, according to spokeswoman Song Meeyoung.
But the plans may be reviewed when economic conditions improve, Song said.
With oil prices continue to hit record highs customers have shunned low-mileage cars such as pickups and sport utility vehicles (SUVs).
Hyundai Motor Co <005380.KS> has a factory in Alabama, which produces 300,000 vehicles a year, and Kia is building a plant in Georgia with the same capacity.
Hyundai's Kim said the company might make a car at Kia's plant, which will be completed by the end of 2009, according to Song.
"We may produce a Hyundai car at the Kia plant if the platform is compatible," Kim was quoted as saying.
On Tuesday, a Hyundai Motor Group official said Kia was considering manufacturing an SUV at its first US factory.
Shares in Hyundai fell 1.8 percent to 87,500 won as of 9:58 p.m. EDT while Kia lost 1.82 percent to 13,450 won, both underperforming a 1.15 percent fall in the broadermarket <.KS11>.
(Reporting by Cheon Jong-woo; editing by Jonathan Hopfner)