Kia Grows, But Not Ready for U.S. Plant

Kia Motors America Inc. is tracking to sell more than 250,000 units in the U.S. this year, more than Subaru of America Inc., Mercedes-Benz USA Inc. and BMW of North America Inc.

Moreover, Kia has grown faster in its first eight years in the U.S. than did either Honda Motor Co. Ltd. or Toyota Motor Corp., says Peter Butterfield, KMA's recently installed executive vice-president and chief operating officer.

However, Kia's breakneck sales pace — up 19% in the first half of 2002 alone, versus an overall market that declined by 3.2% — and ever-expanding model lineup do not yet dictate the need for local assembly, executives say. That despite the fact Hyundai Motor Co. Ltd., Kia's auto making counterpart in the expansive Hyundai Group, will launch production at a new plant in Montgomery, AL, in 2005.

“There are no plans to put Kia in the (Hyundai Alabama) factory today,” says Butterfield, although “Kia would love to see a product go in there someday.

“The long-term strategy of the Hyundai Group is to be in the top five (auto makers) worldwide by 2010,” he continues. “You can't do that unless you're assembling, designing and building outside your home market.”

Butterfield points out that Kia is spending $80 million to open a research and development facility in Irvine, CA, this fall, but insists “there is no timetable” for U.S. production.