Kia Motors and its Chinese subsidiary, Dongfeng Yueda Kia, have broken ground for a third car assembly plant in the Yancheng Economic Development Zone in Jiangsu Province.
The factory will have annual capacity of 300,000 vehicles when completed in the first half of 2014 and marks an aggressive move by Kia to further strengthen its presence in China.
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Combined with the current annual capacity of two existing plants in the zone, 130,000 and 300,000 units respectively, Kia will then be able to produce 730,000 vehicles in China a year.
Hyundai Motor Group chairman Mong-Koo Chung said the third plant “will be an opportunity for us to make further progress on the quality front as well as increase overall customer satisfaction. I believe that Dongfeng Yueda Kia will become one of the most trusted brands in the Chinese automotive industry.”
The new plant will be located only 5km (3 miles) from Kia’s second plant, enabling use of various existing infrastructure facilities and maximizing synergies among all three plants.
In addition to press, body weld, painting, assembly and engine module processes, the plant will house a technology research centre and 1.96km high speed test track.
The flexible layout will give the automaker freedom to expand annual capacity by 100,000 units to 400,000 units as a continued increase in demand is expected.
After completion, Kia plans to produce China-specific models that reflect local market preferences in the new plant.
Dongfeng Yueda Kia has seen significant growth in China with sales of 432,518 units in 2011, up 326% over 2007 (101,427 units). So far in 2012 (to the end of May), thanks to the popularity of locally produced models like the K2 (a Chinese version of the B-segment Rio), C-segment Forte (Cerato in some markets) and Sportage crossover, sales reached 185,543 units, up 16.7% year on year.
Kia opens second plant (2007 report)
