Kia signs for third plant in China
Hyundai Motor Group Chairman Chung Mong-koo (center) examines vehicles produced at Kia Motors’ second plant in China’s Jiangsu province yesterday. Provided by the group
Kia Motors, Korea’s No. 2 automaker, signed a deal yesterday to build its third Chinese assembly plant in a bid to keep up with fast-growing demand in the world’s leading auto market.
The deal calls for the plant to be built by the second half of 2014 with an annual capacity of 300,000 cars.
This output will compliment the production of 430,000 cars at the carmaker’s two assembly lines in Yancheng, a city in southeast China’s Jiangsu province.
The third plant will be built just 5 kilometers (3.1 miles) from one of the two existing Kia plants, which is expected to boost efficiency as the two can share production related infrastructure, Kia said.
The regional Chinese government offered 1.5 million square meters (370 acres) of land at no cost as an incentive to draw foreign investment.
Kia makes cars in the country as part of a joint venture called Dongfeng Yueda Kia Automobile Company. Kia said its market share rose to 3.5 percent as of late September, the first time it has ranked among the top 10 carmakers in China.
“As China has become a competition ground for global automakers, Chinese consumers’ expectations are rising,” said Hyundai Motor Group Chairman Chung Mong-koo, who attended the signing ceremony there yesterday. “Our plants in China will be successful only if we can provide quality cars for consumers and improve the power of our brand there.”
Kia’s sales grew from 101,427 units in 2007 to 333,028 last year. Kia released the K5 midsize sedan and Pride subcompact this year, and its total sales through October this year reached 341,682.
Kia, an affiliate of Hyundai Motor, said if Hyundai’s output is factored into the equation, the combined production of the two carmakers would extend to 1.73 million cars per year once the new plant is completed.
The two aim to sell 1.15 million units in China this year, with Hyundai contributing just over half, or 720,000 vehicles. This would rank Hyundai Motor Group, including Kia, third in car sales in the country.
By Limb Jae-un, Yonhap [jbiz91@joongang.co.kr]
with the Korea JoongAng Daily
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