In order to meet the demand from the North American market, Kia Motors plans to set up a production plant in Mexico, reports Yonhap.
The company is expected to sign a memorandum of understanding (MOU) with the state of Nuevo Leon to construct a plant in Monterrey, which would also ship to the US.
Go deeper with GlobalData
A source said, “An MOU should be signed next month, with construction to start soon after.” The Monterrey plant will be the company’s first production facility in Mexico.
The plant, which will have an annual production capacity of 300,000 vehicles, is expected to begin production in 2016. It will produce compact Soul, subcompact Forte and minicompact Picanto.
In April, Kia Motors America sold its five millionth vehicle, with the monthly total up 12.9% to 53,676, of which 14,403 were the Soul model alone, a monthly record for the car. Some analysts say that if KMA had the capacity at its West Point plant, it would add the Soul model there alongside the Optima, Sorento and Hyundai Santa Fe. A new low-cost plant in Mexico could be a solution.
Mexico is also seen as a vehicle market with good long-term demand prospects.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataA strong South Korean currency is putting pressure on Korean manufacturers to increase output at overseas operations.
