Dive Brief:
- Hyundai Motor Co. plans to expand its supply chain localization efforts in key markets in the coming years to cut down on costs and stabilize supply for its growing vehicle lineup, executives said at the company’s 2026 CEO Investor Day last month.
- In North America, the auto manufacturer aims to source 80% of parts used in vehicles manufactured for the region from local suppliers by 2030, up from 60% today, according to José Muñoz, president and CEO.
- “We'll identify and expand local supplier networks, which will secure supply stability, reduce logistics costs and mitigate regulatory exposure,” Muñoz said. “Also, by improving utilization at new plants to reduce fixed costs and by optimizing manufacturing specs and processes, this will improve the cost structures of major plants to [Hyundai Motor Co.]'s best levels.
Dive Insight:
Supply chain localization continues to be a priority for Hyundai as it gears up to launch more than 100 new products by 2030. As an example, the company has increased parts sourcing for its Santa Fe and Tucson models sold in the U.S. from suppliers based in the country by more than 10 percentage points, according to an Investor Day slidedeck.
As it grows its North America supplier base, the company expects to add 1.27 million units of global manufacturing capacity by 2030, including 500,000 in the U.S., according to an Aug. 26 press release.
The auto manufacturer, which announced plans to invest $21 billion in U.S. operations a year ago, is also leaning into localization in other markets, including India. Hyundai said it plans to source 90% of content used for vehicle manufacturing in the country by 2030.
“We've been in India for 30 years learning what customers want and how to deliver in the most efficient way possible,” Muñoz said. “India is also a factory for the world. Our cost position there is more than 15% better than our global baseline.”
Beyond localization, Hyundai also aims to reduce material costs for its electric vehicles by 30% by 2030. Combined with its localization efforts, as well as adjustments to its manufacturing and design processes, Hyundai said it will reduce its cost-to-sales ratio by 3 percentage points over the next few years, Muñoz said.
Other manufacturers across multiple sectors are investing in U.S. production and sourcing to offset regulatory hurdles and limit costs.
Nissan is in the midst of transforming its U.S. operations with a focus on greater localization and smarter plants, naming Victor Taylor as division VP for U.S. manufacturing, supply chain management and production engineering to help strengthen the strategy.
Meanwhile, computer manufacturer Lenovo continues to ramp up regional manufacturing to reduce geopolitical risk and boost supply chain resilience. For example, over the last two years, the company has doubled capacity at a North Carolina plant to support rising server demand, Benjamin Massie, VP of global supply chain, servers and storage, told Supply Chain Dive.
