Hyundai will make its Santa Cruz pickup trucks at its Alabama plant in 2021

Hyundai confirms it will put first pickup, the Santa Cruz, into production at Alabama plant in 2021.

Hyundai handout

After an unexpectedly long delay, Hyundai has given the go to build a new compact pickup truck, a version of the Santa Cruz concept from the 2015 Detroit Auto Show, at its Montgomery, Alabama assembly plant.

Finding a place to build Santa Cruz was one of the biggest challenges delaying the project, according to a senior Hyundai official. The automaker will spend $410 million to expand the Montgomery plant which, in recent years, has struggled to keep up with demand for Hyundai products like the newly redesigned Santa Fe SUV. Adding Santa Cruz will create 200 direct jobs at the plant and another 1,000 for regional suppliers, the Korean carmaker said Wednesday.

If Santa Cruz were built today, it would become the smallest pickup on the market. With it, several Hyundai officials have said, they hope to recreate at least some of the success classic compact trucks, like the 1970s-era Chevrolet Luv, had attracting first-time baby boom buyers.

Pickups, on the whole, make up a massive segment of the U.S. automotive market with three full-size models: the Ford F-150, Chevrolet Silverado and Ram 1500 topping the sales charts year after year. Midsize models like the Toyota Tacoma, had been losing momentum since the 1980s but began rebounding early this decade with the launch of new offerings such as the Chevy Colorado and, more recently the Jeep Gladiator.

But it was the now-abandoned compact truck segment that proved wildly popular when boomers were getting their first set of wheels, models like the Luv proving rugged, affordable and cheap to operate. The Hyundai Santa Cruz hopes to tap into a similar target audience, though it is being position as “more of a lifestyle, urban commuter vehicle,” said the executive with Hyundai Motor America, than a rugged, go-anywhere product.

That’s because it will be based on a car-like crossover platform, rather than a traditional, body-on-frame truck chassis. Only one other pickup uses that approach, the large Honda Ridgeline.

“They may be tapping into something,” said Stephanie Brinley, principle automotive analyst with IHS Automotive told CNBC.

But how successful the Santa Cruz will be depends on several factors, including pricing and Hyundai own volume targets, said Brinley, cautioning that if the truck comes in somewhere in the low $20,000 it could have a large audience, “but if it winds up at $34,000, that won’t be the type of vehicle that appeals to a college kid,” as the compact trucks of decades past once did.

Hyundai Santa Cruz rear view


Hyundai hasn’t said what sort of numbers it is gunning for, but Brinley said she didn’t think hitting 30,000 a year would be a problem.

One of the questions is whether the Korean carmaker has waited too long to bring Santa Cruz to market. The company insider said it will likely be at least another 18 months before it can go into production, which would mean more than six years after the concept debuted to much acclaim at the North American International Auto Show in Detroit.

“We have so much on our plate (and) there were other priorities over the last several years,” such as mainstream models like the latest Santa Fe, a ranking Hyundai insider said on background Wednesday afternoon. “One of the big challenges was figuring out where we could build it.”

Another question is whether the production pickup will retain the unique bed extender that could stretch its cargo bed by more than an extra foot when necessary. The company insider would only tell CNBC that potential buyers “can expect to see something different with the tailgate.”

Just as the long-fading midsize truck market rebounded spectacularly over the past five years, the compact segment could also rebound, especially if Hyundai shows some success. Ford has already said it is working on an even smaller model than the midsize Ranger nameplate it revived last year. Volkswagen showed off a possible compact model in concept form at the New York International Auto Show last April and, said Brinley, she would expect that the Fiat brand might make a play at the segment, as well.

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