NEW KIA PLANT IN CHINA

Kia Motors has announced that it plans to build a third manufacturing plant in China in order to meet dramatically increasing local demand and to maintain its positive sales momentum in the Chinese market.

The signing ceremony for the investment MOU (Memorandum of Understanding) to build the new Dongfeng Yueda Kia Plant 3 in Yancheng, Jiangsu Province was attended by more than 50 Chinese government officials and Kia Motors representatives, including Hyundai Motor Group Chairman, Mong-Koo Chung. Dongfeng Yueda Kia (DYK) Motors is a 50/50 joint venture through which Kia Motors manufactures, markets and services vehicles in China.

Dongfeng Yueda Kia Plant One

The new plant will be located just five kilometers from Kia’s second plant in Yancheng’s Economic and Technology Development Zone. Upon completion of the plant, which will be able to produce 300,000 units annually, Kia will have increased its production capacity in China from the current 430,000 units at its existing two plants to a total of 730,000 units per year.

Mr. Chung said, “With our third China plant, which we will begin constructing at the end of next year, Kia will be well-positioned to provide its growing Chinese customer base with stylish, safe, reliable and high-quality vehicles while also helping to further develop the local economy and improve people’s lifestyles”.

Kia plans to begin construction of the new plant at the end of next year and anticipates completion of the facility and the roll-out of production models in the second half of 2014.

Strategic models developed especially for the Chinese market to reflect local needs and preferences will be built at the new plant, but the specific models have yet to be finalized as Kia continues to study the rapidly transforming Chinese automobile market.

Dongfeng Yueda Kia Plant Two

Kia has been one of the best performing foreign brands in China in recent years.  Sales of locally-manufactured Kia vehicles reached 101,427 units in 2007, and the company posted a 40% year-on-year increase in 2008, selling 142,008 units after the second DYK plant was put into full operation. Kia continued its strong growth in 2009, recording a 70% year-on-year increase (241,386 units sold).  Last year, Kia posted further strong double-digit growth, reaching 333,028 vehicles sold for 38% year-on-year growth.

So far this year (through the end of October), sales of locally produced vehicles recorded 341,682 units thanks to the introduction of the highly competitive mid-size K5 sedan (known as ‘Optima’ in other markets) and the sub-compact K2 (a localised version of the all-new Rio).

Combined with its sister company Hyundai Motor Co., which has annual capacity in China of 720,000 units, the Group expects to reach sales of around 1,150,000 units in 2011, placing it third in the Chinese market behind VW and GM.