Kia Motors and Chinese joint venture partner Dongfeng Yueda Kia (DYK) Motors, officially opened their second manufacturing facility in China at a ceremony in Jiangsu Province on Saturday.
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The new manufacturing facility is 3.5km southeast of DYK’s first plant and is situated on 1,470,000 square metres of land with 270,000 square metres of building space.
Kia said the opening of the $US800m passenger car plant meant its plans to boost overseas production to over 1m units by 2009 were on track.
When in full operation, the facility will have an annual production capacity of 300,000, bringing total production capacity in China to 430,000.
In addition to the 300,000-unit annual capacity Slovakia plant which began production in December 2006, Kia’s overseas production capacity will be further boosted to 1,030,000 units annually with the completion of the first North American plant in Georgia, US, in the second half of 2009.
Kia Motors chairman & CEO, Mong-Koo Chung said: “This second plant in China plays a significant role in our ‘glocalization’ strategy of thinking globally and acting locally to bring ultimate satisfaction to our valued customers around the world.”
“Today also signifies a very important milestone in the evolution of the Kia brand in the increasingly competitive Chinese market as Kia Motors strives to be among the top makers in China by the end of the decade,” he added.
In 2008, Kia plans to produce 100,000 units each at the two Chinese plants to meet its annual production and sales target of 200,000 units.
By the time the second plant is operating at full capacity in 2010, Kia expects to sell 440,000 vehicles in China market through the introduction of localised products that satisfy the tastes of local consumers, implementation of cost-cutting measures to raise price competitiveness, development of high standard exclusive dealerships and enhancing the brand image by leveraging existing sports sponsorships and carrying out diverse localised marketing campaigns.
The new plant began producing the Cerato sedan in October, with the five-door hatchback version added earlier this month.
Initial targets were met, with approximately 7,000 units produced by the end of November.
Kia also plans to introduce a new model to the plant in 2009.
The new plant currently employs 1,400 workers direct employment will eventually total 2,750.
Several suppliers such as Hanil E-Hwa and Daewon Industry have already completed expansion to serve the new plant.
To reduce operating costs, Kia also plans to localise more than 90% of all components.
The Chinese government provided favourable site acquisition terms, various tax benefits, and railway, port and road infrastructure expansion.
