- Signs joint venture with Dong Feng Train Group
- Local production and sales to start in November with projected production capacity of 300,000 units
Seoul 4 April 2002 - Kia Motors signed a joint venture agreement with the state-owned Dong Feng Train Group, one of China’s top three automakers, and the Wieda Group in Beijing on March 29. The agreement was signed by Kia Motors President Noi-Myung Kim, Dong Feng Train Group President Miyao Wei and Wieda Group President Hu Yorin.
Under the terms of the agreement, Kia Motors will take managerial control with a share of 50% while Dong Feng and Wieda will hold 25% each. The new entity will be called the Dong Feng-Wieda-Kia Train Limited Company.
The ceremony was attended by Chung Mong-Koo, Chairman of the Hyundai Motor Group, who said, “We will raise production capacity by rationalizing and modernizing the Pride production at the plant in Yencheng City. Later this year we will prepare construction of a new plant and develop new models for the China market. The new plant will have an international-standard production and sales capacity and will be the finest facility of its type in China.” The new plant will raise capacity from the current 50,000 units at the existing plant to 300,000.
Under Kia’s existing joint venture agreement with the Wieda Group, the Korean manufacturer can produce only the Pride small car. The new agreement will allow Kia to produce and sell a full range of automobiles for the first time since the company entered the Chinese market six years ago.
Kia will begin a new small-car project called the C-car which will be produced alongside the Pride from November. Other new models will be introduced from 2004.
China plans to develop several large automakers by integrating many of its small manufacturing companies by 2005. The government is also lowering tariffs and abolishing import quotas. Around the time of the 2008 Beijing Olympics, China is projected to become a middle-level nation in terms of income, leading analysts to predict an automobile market of more than 50 million vehicles by 2010, the world’s largest.