The Gandini Group in Itu, 100km (62 miles) from São Paulo City, which has represented Kia in Brazil since 1992, has just set up an assembly line in Uruguay to build the Bongo light truck at a rate of 12,000 units yearly with two shifts.
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The US$25m investment was funded solely by the Brazilian group, with industrial and technical assistance from the Korean automaker.
Gandini built a complete new assembly line and paint shop at Nordex, a Uruguayan company that already assembles Renault and Dong Feng/Aeolus trucks.
The Uruguayan Bongo line will build just the one model: the K2500, single-cab, 4×2 drive, chassis-cab. Dealers supply and install the load bed. With 4,000lb payload, it’s Kia’s best selling model. Seven other versions will continue to be imported from South Korea.
That one Uruguay assembled variant will enter Brazil free of import duty, under Mercosur free trade accords, giving it a hefty price advantage.
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By GlobalDataHyundai’s HR 100, the Bongo’s twin, is already assembled by Caoa Group, the automaker’s Brazilian distributor, in the country’s Centre West region, the last area to be granted fiscal incentives to encourage auto assembly.
Gandini’s option of using Mercosur trade rules to its advantage suggests Brazilian government policy for the auto industry still needs a little work.
