Kia Motors said it plans to raise production capacity at its South Korean plant in Gwangju by 25% by 2013 to meet rising demand for its Sportage and Soul SUVs.
The Hyundai Motor affiliate is considering an investment of KRW150bn (US$132.60m) to boost annual capacity at the plant from 500,000 to 620,000 vehicles. The plan would require union approval.
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Despite strong demand for affordable, quality models, Kia and Hyundai and struggling to produce enough cars because of their stretched manufacturing capacity. Analysts say this could also slow their volume growth next year.
Kia’s factory in the southeastern city of Gwangju is one of its four auto plants in South Korea and accounts for about 18% of Kia’s global production capacity.
