KIA AUTOMOTIVE AUSTRALIA
China / Page 1 / May 14, 2004KIA TO BUILD A SECOND PLANT IN CHINA
Kia, Australia’s fastest growing major brand, has announced plans to set up a second car factory in China in a $924 million deal that will see 300,000 cars a year rolling off production lines by 2006, providing Kia with a four fold increase in its Chinese production capacity.
The announcement was officially made at a signing ceremony attended by top Kia executives and Chinese officials in Nanjing, China. The decision to build the plant was based on creating a stronger presence in China that will help Kia claim an increased portion of the large Chinese car market that is predicted to grow to 10 million by 2010.
The new plant that is scheduled to break ground this July will have an estimated annual capacity of 300,000 units and will be ready for production by 2006. The new facility will be built next to Kia's first China plant in Jiangsu that currently produces 130,000 sedans and recreational vehicles a year.
The plant will be designed to produce Kia’s complete lineup, including small passenger cars between 1,300cc-1,500cc and recreational vehicles, as well as competitive new models which will be introduced through this plant to meet Chinese consumers’ continued increasing demand for Kia vehicles.
The Kia plant will be accompanied by 40 other Korean suppliers, including Hyundai Mobis, to enhance productivity and reduce production costs. Kia plans to increase local production capacity up to 90 per cent to exemplify a true Korean-Chinese economic collaboration.
In July 2002, Kia Motors established Dongfeng Yueda Kia Motor Co. in China, a joint venture with China's Dongfeng Motor Co. The company is currently producing compact sedans exclusively for the Chinese market. Dongfeng Yueda Kia Motor accounted for 2.4 per cent of the Chinese vehicle market last year, up from 1.6 per cent in 2002.
The new plant announcement comes at a time when Kia is making inroads in China with its TianLiMa model which sold 7,000 units in February this year. Kiaaims to sell 80,000 cars in China during 2004, marking a 57 per cent increase from last year with the introduction of the Carnival in addition to the popular TianLiMa.
“Based on the mutual trust between the Chinese government and Kia Motors, we want to turn our plant into one of the most competitive car manufacturing facilities not only in China, but in the world,”said Chung Mong-Koo, Chairman of Hyundai-Kia Automotive Group at the contract signing. “With new models that correspond to the demand of Chinese consumers, we will provide great quality and service as a local corporation.”
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Picture Caption: The Kia Carnival is Australia’s number one people mover and it will soon join Kia’s line up in China.
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Ric HullManaging Director
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Edward Rowe
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