Kia to Fill New Hyundai Group Plant in Slovakia

GENEVA – Kia Motors Corp. will fill the new Hyundai Group factory in Zilina, Slovakia, with 200,000 units beginning in 2006.

The €700 million ($855 million) factory was expected to be shared by Kia and Hyundai Motor Co. Ltd., but Kia alone has enough growth potential to fill it, says Kia Chief Operating Officer Yong-Hwan Kim.

Kia expects to have 2% of the European market by the end of 2005, or about 300,000 units, he says at the auto show here.

The new plant will have 1.7 million sq.-ft. (160,000 sq.-m) of floor space, and 2,400 employees. Groundbreaking will occur in April and production will be launched in November 2006.

The plant is expected to produce a facelifted version of the Cerato and a replacement for the Rio. The Cerato competes in Europe’s C, or lower-medium, segment and the Rio replacement will be positioned in the B, or super-mini, segment.

Hyundai Group, which is owned 10% by DaimlerChrysler AG , had been considering Poland and Slovakia as sites for the plant. Volkswagen AG has a factory in Bratislava, 124 miles (200 km) from Zilina.

“As well as supplying top-quality Kia cars for our expanding European dealer network, our new factory will open doors to new market sectors,” says Kim.

Analyst Nigel Griffith of Global Insights in London says that within several years the factory probably will add a C-segment Hyundai model, perhaps in a second stage of investment leading to an expansion of capacity to 300,000 units annually.

Kia says the plant will ramp up to 100,000 units by 2007 and 200,000 in 2008, with equal production of the Rio replacement in 3- and 5-door models, and the Cerato in 3-, 5- and station wagon versions.