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Kia deny Media Reports that suggest a new plant

Saturday 27th April 2013 14:24:39

Kia Motors denies media reports this week that suggest the company would be building a new production facility in the U.S.A by next year, to try and tackle a shortage of capacity that has apparently put the brakes on what should be excellent sales growth, in an extremely key market for the company.


A newspaper claimed Kia Motors would be building a new plant


Financial News, a Korean newspaper said this week that the Hyundai Motor Group (Kia Motors and it's Hyundai Motors affiliate) have recently been in talks with state officials in Georgia to construct a new plant, which would have an output capacity of upto 150,000 vehicles per year. The report explained that Ground would definitely be broken between April and June of this year. Kia Motors already have a factory in Georgia, which has a 300,000 vehicle production capacity.


This particular plant produces the Sorento SUV, the Optima Sedan and the Sante Fe SUV from Hyundai over three working shifts and employs over 3,000 workers. Hyundai also has an Alabama factory, which produces the Elantra compact and the Sonata Sedan. A Kia Motors spokesperson said that the report is completely groundless. A Georgia Department of economic development spokesperson said that there were no active products with Kia, though any expansion would be supported. Drew Ferguson, who is the Mayor of West Point also said that he was not aware of any such plans.


Kia said the company would invest $1.6 billion over sixteen years


Last year in November, Kia Motors said that the company would be investing $1.6 billion over a period of sixteen years on the Georgia plant for new machinery. The report said that in 2010 Kia Motors had decided internally to build new production facilities in Georgia, though the plans were held off because of the economic uncertainty. Kia and Hyundai, which were the only major manufacturers to increase their United States sales during a downturn in the Worldwide economy have been grappling with falling United States sales and market share recently, the company's have been crippled by the production capacity which has been stretched to it's limits and also the rise in competition from such rivals as Toyota.


Combined United States sales of Kia and Hyundai fell by 3% from January to March of this year, from the previous year, underperforming in the recovering market. A senior United States sales executive for Kia said in January that the company certainly wanted to boost it's market share in the United States this year. Chairman of Hyundai, Chung Mong-Koo has slowed additions in capacity over the past couple of years, aware that the massive recall crisis for Toyota in 2009 was partly a result of large capacity growth by the company.

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