Kia to Launch New China Plant in 2007

SHANGHAI – Kia Motors Corp. will begin production next October at its new $800 million Dongfeng Yueda Kia Motors Ltd. plant in China’s Yanchung, Jingsu Province, Ward’s learns.

The DYK plant also builds the Kia Carnival multipurpose vehicle and Optima and Cerato sedans. It is expected to meet its full 130,000-unit annual capacity this year to meet local demand. DYK has increased its annual sales by an average of 75% over the past three years, Kia sources say.

DYK, a joint venture of Kia and China’s Dongfeng Automotive Group established in 2002, last month broke ground on the new 3.9 million sq.-ft. (367,794 sq.-m) plant located just 2.2 miles (3.5 km) from DYK’s existing facility.

The new plant will have an annual capacity of 300,000 units, boosting DYK’s total annual capacity to 430,000 vehicles.

Kia has not disclosed which vehicles will be produced there.

The existing DYK plant soon will launch production of the Chinese version Rio B- segment sedan, which makes its debut at the Auto China 2006 show this week.

Chinese Rio makes debut at Auto China 2006 show in Beijing.

Ward’s learns the Rio will replace the highly successful TianLiMa, based on the Hyundai Accent. The TianLiMa has led sales of B-segment cars in China since its introduction four years ago.

Meanwhile, DYK’s sister auto maker and “friendly competitor” Beijing Hyundai Motor Co. Ltd. is building a second 300,000-unit capacity plant just 1.2 miles (2 km) from its current facility in the Shunyi industrial development district near Beijing International Airport.

The existing plant produces the Hyundai Sonata, Elantra, Tucson and Accent for the Chinese market.