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Aerial rendering of the Hyundai Steel-POSCO Louisiana steel mill. / Hyundai Steel

Hyundai Motor Group's vision of spanning from molten iron to finished automobiles has become a reality 40 years after entering the U.S. market. On the 4th (local time), ground was broken on an untamed site in Louisiana for a steel mill being built jointly by Hyundai Steel and POSCO. Backed by a total investment of 5.8 billion dollars (approximately 8 trillion won), Hyundai Motor Group plans to establish a local supply chain spanning raw materials to finished vehicles, overcoming steep U.S. tariff barriers.

According to automotive and steel industry sources on the 6th, the construction of this steel mill establishes a traditional automotive industry value chain in the U.S. for Hyundai Motor Group exactly 40 years after first entering the U.S. market.

Following its founding in 1967, Hyundai Motor gained automotive manufacturing experience through a technical partnership with U.S.-based Ford. Moving beyond simple assembly toward independent manufacturing, it unveiled its first proprietary model, the Pony, in 1975. The company began overseas exports to Ecuador and other markets the following year, followed by an official entry into the U.S. market in 1986 led by the Pony Excel.

Vertical integration linking steel and automobiles accelerated under the Hyundai Motor Group structure in 2001. After separating from the Hyundai Group, Incheon Iron & Steel (now Hyundai Steel) launched as an affiliate of Hyundai Motor Group in April 2001, serving as a core pillar of its automotive business.

The Louisiana steel mill marks the first instance of transplanting this entire industrial framework directly into the U.S. Aiming to begin operations in 2029, the mill is projected to produce 2.7 million tons of steel products annually. Automotive steel sheets produced here can be supplied to U.S. production hubs, including Hyundai Motor Manufacturing Alabama, Kia Georgia, and Hyundai Motor Group Metaplant America (HMGMA).

This setup enables Hyundai Motor Group to establish an integrated local system covering everything from raw material procurement to finished vehicle assembly within the U.S. Industry observers evaluate that this approach will alleviate high tariff burdens while enhancing supply chain stability.

Beyond expanding Hyundai Motor Group's footprint, the investment holds significant importance for the broader South Korean steel industry's entry into the U.S. market, as POSCO participated as a co-investor by acquiring a 20% stake in the mill. In response to U.S. trade barriers, South Korea's automotive and steel sectors have chosen local manufacturing as a unified solution.

                                                                                                            Kim Han-seul