| SEOUL, Korea – Kia Motors is looking to expand its presence in the US by building a plant there. It follows a meeting between Kia CEO Chung Mong Koo and Mississippi governor Haley Barbour who is in the South Korean capital Seoul to discuss the feasibility of building it in the southern US state.
The state of Mississippi has offered plans to provide land and other favourable conditions for Hyundai Motor Group, the parent company, if it wants to set up a plant there, according inside information. However, while the group is interested in the state, it is keeping its cards close to its chest as to the precise location and timetable of where and when it might build its first Kia plant in the US . It would be the automotive group's second US plant after Hyundai Motor’s $1.1 bn Montgomery, Alabama factory which opened in May.
"A plant in Mississippi, which will be about two to three hours drive from Hyundai’s Alabama plant and suppliers there and will be beneficial for the group in cutting costs and creating synergies," said a group official. "We will decide whether to set up the plant and craft detailed plans after considering the scale of the US market and its prospects."
A Hyundai spokesperson was quoted by Korean newspapers as saying 400,000 a year is the threshold to justify a new plant. Kia also reportedly is considering setting up a research & development centre for next-generation vehicles close to the new US plant.
A Kia plant in the US would most likely produce sports-utility vehicles as Hyundai produces mid-sized saloons at its Alabama plant where it plans to produce 150,000 Sonata models by the end of this year, double its production in 2006 and ultimately boost its capacity to 500,000 by 2010.
Last year Hyundai Motor sold 418,000 cars in the US and Kia Motors, 270,055 units there and is nearing the 300,000 figure for 2005 . The combined market share of the two brands in the US market reached 4.2 per cent in July, up from 4.1 per cent last year and 3.8 per cent in 2003.
Kia has two other overseas plants. It has a joint venture in China , where it plans to produce 130,000 cars, and Slovakia where it plans to produce 200,000 units a year starting next year.
Hyundai Motor operates four carmaking plants overseas that are expected to turn out a total of 630,000 cars this year. Its Indian plant will make 250,000 cars, while its plants in China and Turkey are expected to produce 200,000 and 60,000 cars, respectively.
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