(May 16, 2011) MONTGOMERY, Ala. — Hyundai Motor Co. will invest $173 million to expand and modify an engine plant in Alabama, the state said on Monday. The expansion, which is expected to be completed in the fall and start production in March 2012, will make the NU engine for the compact Elantra sedan being produced at the automaker's Montgomery  plant.

The investment will create 214 new jobs, the state said.

Hyundai's U.S. sales are booming, with the South Korean automaker the fastest growing major automaker in the U.S. market. The Alabama plant makes two of the hottest selling cars in the U.S. market, the midsize Sonata sedan and the compact Elantra sedan. Its assembly lines operate as much as 20 hours per day during weekdays and on some Saturdays to meet high demand.

In addition to today's announcement, a second Hyundai U.S. assembly plant could follow at some point .

Sources told Reuters that Hyundai in recent months has spoken at least informally with at least three U.S. states, including Alabama, about plans for a second plant in the southeast of the United States.

Officials in South Carolina and Mississippi expressed interest in luring the Korean automaker to place new production in those states, the sources added.

Hyundai's U.S. sales rose 31 percent in the first four months of 2011, boosted by a model lineup laden with fuel-efficient cars as consumers seek vehicles that can help overcome gasoline prices that have risen above $4 per gallon in much of the country.

Hyundai's U.S. CEO, John Krafcik, earlier this year said the automaker's U.S. sales will be constrained by limits to its current production, but has not commented on any plans to expand the company's U.S. production.

Hyundai is considering at some point placing a second assembly plant on the same site as its existing factory south of Montgomery. The company owns about 1,750 acres at its Alabama site, and its current assembly plant takes up less than a third of that land.

Hyundai opened its Alabama plant in 2005.

Source: Reuters