Kia Motors Corporation and its Chinese joint venture partner, Dongfeng Yueda Kia, have started construction of the company’s second manufacturing plant in China, in Yancheng, Jiangsu Province.
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The new plant is scheduled to be completed by the end of 2007 and will have an annual production capacity of 300,000 vehicles.
Hyundai-Kia Automotive group chairman Mong-Koo Chung said: “With the additional 300,000 units to be added to our annual Chinese production capacity, Kia Motors is now ready to emerge as a major player in China.”
The secretary of Jiangsu Provincial Party Committee Li Yuanchao, said: “Kia Motors’ active investment in the region in recent years is a strong sign of its commitment, not only to Yancheng City and Jiangsu Province, but also to the long-term development and prosperity of the Chinese automotive industry. The Chinese government will spare no effort to support the construction of the new plant.”
The highly-automated facility will be located about two miles (3.5km) from the first plant, which is also located in Yancheng. The first plant, which was the subject of a major capital investment by Kia in 1998, is managed by Dongfeng Yueda Kia.
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By GlobalDataDongfeng Yueda Kia plans to invest US$800 million in the project by issuing new shares and borrowing from local lenders. The Chinese government has promised a range of incentives including tax breaks, provision of land at favourable prices and building of infrastructure such as roads and railroads.
The new plant will add 2,800 new jobs to the current workforce of 1,900 Dongfeng Yueda Kia employees in the region, which will result in total direct and indirect employment creation – including jobs at Kia contractors/suppliers – of 15,000 posts.
Kia will encourage its Korean suppliers to expand into China to ensure stable parts supply and ongoing price competitiveness. Kia Motors plans to use China and Slovakia – in the form of its European plant, which is on track for completion by the end of 2006 – as its two pivotal, global manufacturing bases.
Dongfeng Yueda Kia was established as a joint venture between Dongfeng and Yueda of China and Kia Motors in 2002. Last year, it sold 62,506 vehicles in China, including the D-segment Optima, Carnival MPV and Tianlima compact sedan.
Donfeng Yueda Kia expects to increase sales to 130,000 units this year. The completion of the new plant will lift Kia’s total annual output capacity in China to 430,000 units. In 2008, the Hyundai-Kia Automotive Group’s total production capacity in China will reach 1.03 million units.
