Kia Motors Corp., South Korea’s second-largest automaker, officially opened its fourth overseas manufacturing plant with a maximum output of 400,000 units a year in Mexico on Wednesday (local time) in hopes that the new factory would help it boost not only its market share in the Latin American country but also exports to nearby countries with tax benefits.

“Kia Motors’ plant in Mexico will produce world’s top quality vehicles with innovative design and deliver them to the Mexican market as well as other countries around the world,” Hyundai Motor Group Chairman Chung Mong-koo said at a ceremony held in Pesqueria city in the Mexican state of Nuevo Leon to celebrate the opening of the plant. “The Mexico plant will surely become a world-class facility for vehicle production based on extensive knowhow Hyundai Motor and Kia Motors have built up in producing high-quality cars.”

About 500 guests attended the opening ceremony, including local political figures and employees of Kia Motors and its suppliers.

The Korean carmaker, which is also the sister company of Korea’s largest car maker Hyundai Motor Co., signed an investment agreement to build a manufacturing facility in Mexico in August 2014. Two months later, Kia Motors broke ground for the facility that would be capable of producing up to 400,000 units annually. To build the production base in Mexico, Hyundai Motor Group has invested a total of 1.97 trillion won ($1.8 billion), including 1.12 trillion won in building Kia Motors’ plant, as well as 450 billion won and 400 billion won for each auto parts factory of Hyundai Mobis Co. and Hyundai Wia Corp. that are auto component makers and suppliers under the conglomerate.

Kia Motors began mass production of its compact K3 vehicle - also known as Forte in the local market - in May at the new plant. With the opening of the new factory, Kia Motors is now capable of producing 3.56 million vehicles annually across the globe including 1.60 million units from its facilities at home and 1.96 million units abroad. Kia Motors’ three other overseas facilities are in China, Europe and the United States.

The new Mexico plant is expected to allow Kia Motors to establish a foundation to compete with other global carmakers in the Mexican market where 1.35 million vehicles are sold every year as it is subject to tax benefits for cars produced at the plant for the local market and outbound shipments that account for about 10 percent of the total production at the factory.

Kia Motors aims to sell 55,000 vehicles in Mexico this year, taking up 3.5 percent of the market share. The automaker plans to launch customized vehicles that are specifically tailored to local consumers’ needs, and all-new model of Pride, also known as Rio in Mexico, will be the first model of such customized vehicles.

Kia Motors’ new plant in Mexico was built on a site of 3.35 million square meters with a total floor space of 200,000 square meters. It has all the facilities needed to complete a vehicle including those of pressing, framing, painting, and designing, as well as additional facilities including a quality-test center, assembling training center, and driving test ground. About 10 partnering firms that supply auto components to Kia Motors also built local facilities at a nearby land area of 1.65 million square meters.

By Hwang In-hyuk

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]