Kia Motors’ Brazilian importer, the Gandini Group, will build a local assembly plant for the Bongo light truck. The factory will be in Pouso Alegre city in Minas Gerais state.
To make the Bongo in Brazil, the Gandini Group has signed a technology transfer agreement with Kia Motors.
The brazilian group will, as a first step, invest $US5 million to build the factory. Between 2006 and 2008, in the second stage of the project, the group will invest over $US12 million in the plant and will have Usiparts, part of the Usiminas steel maker group, as a partner.
In Brazil, Usiparts is involved in many vehicle production processes including stamping, assembling, painting, tooling and fixtures. The company supplies Audi, Fiat, Ford, GM, Iveco, Mitsubishi, Scania and Volkswagen.
Usiparts will invest about $US6.7 million in the Bongo assembly project and the vehicle plant will be built alongside a Usiparts factory.
The Pouso Alegre city and Minas Gerais state governments will are supporting the construction of the plant.
According to Gandini Group, plant construction will start in January and Bongo assembly will start in the second half of 2006. Usiparts will be responsible for assembling and painting the Bongo cabin using components imported from Korea.
“Initially we will also import the powertrain and the vehicle will have 40% local content but we expect to finish the first year at the 60% level,” said Gandini Group president José Luiz Gandini.
The company expects to produce about 600 Bongos in the second half of 2006 but the plant will have a capacity of 6,000 units a year.
The Gandini Group has imported Kia vehicles since 1992 and began making plans for local production four years later. However, Brazil’s economic problems and obstruction by local bureaucrats resulted in a delay until now.
“We signed the technology transfer agreement with Kia in 2002 but decided to wait for the introduction of the new Bongo model before beginning our project,” added Gandini.