- Kia invests USD 645 million in Jiangsu Province
- Kia furthers strategy to become a global top five automaker by 2010
(Seoul) May 13, 2004 ? Kia Motors Corporation today announced its plans to build a second car plant in China's Jiangsu province at a total cost of USD 645 million. The announcement was officially made at a signing ceremony attended by top Kia executives and Chinese officials in Nanjing, China. The decision to build the plant was based on creating a stronger presence in China that will help Kia claim an increased portion of the large Chinese car market that is predicted to grow to 10 million by 2010.
The new plant that is scheduled to break ground this July will have an estimated annual capacity of 300,000 units and will be ready for production by 2006. The new facility will be built next to Kia's first China plant in Jiangsu that currently produces 130,000 sedans and recreational vehicles a year. By 2010, the Hyundai-Kia Automotive Group will be able to produce more than five million units, approximately three million in Korea and two million overseas.
The plant will be designed to produce Kia’s complete lineup, including small passenger cars between 1,300cc-1,500cc and recreational vehicles, as well as competitive new models which will be introduced through this plant to meet Chinese consumers’ continued increasing demand for Kia vehicles.
The Kia plant will be accompanied by 40 other Korean suppliers, including Hyundai Mobis, to enhance productivity and reduce production costs. Kia plans to increase local production capacity up to 90% to exemplify a true Korean-Chinese economic collaboration.
In July 2002, Kia Motors established Dongfeng Yueda Kia Motor Co. in China, a joint venture with China's Dongfeng Motor Co. The company is currently producing compact sedans exclusively for the Chinese market. Dongfeng Yueda Kia Motor accounted for 2.4% of the Chinese vehicle market last year, up from 1.6% in 2002.
The new plant announcement comes at a time when Kia is making inroads in China with its TianLiMa model which sold 7,000 units in February this year. Kia aims to sell 80,000 cars in China during 2004, marking a 57% increase from last year with the introduction of the Carnival in addition to the popular TianLiMa.
Chung Mong-Koo, Chairman of Hyundai-Kia Automotive Group, said: “Based on the mutual trust between the Chinese government and Kia Motors, we want to turn our plant into one of the most competitive car manufacturing facilities not only in China, but in the world.” Chairman Chung added: “With new models that correspond to the demand of Chinese consumers, we will provide great quality and service as a local corporation.”
Together with Kia’s first European plant in Slovakia announced earlier this year, Kia executives expect this second plant in China to be a key step in the company’s strategy to become a global top five automaker by 2010.
Founded in 1944 and now celebrating its 60th anniversary, Kia Motors Corporation (www.kiamotors.com) is Korea’s oldest manufacturer of automobiles. As part of the Hyundai-Kia Automotive Group, Kia is among the world’s fastest growing automobile companies and aims to be a top five global automaker by 2010. Kia’s 15 manufacturing and assembly operations in 12 countries make more than a million vehicles a year that are sold and serviced through a network of distributors and dealers covering 190 countries. Kia today has 30,000 employees and annual revenues of $12 billion. It is the major sponsor of the Australian Tennis Open and an international sponsor of the Davis Cup.