Kia Motors delays production at new China plant

Kia Motors announced on Monday that it has delayed large scale commercial production at its second manufacturing plant in China.

Kia completed building the US$600 million plant with its two Chinese partners at Yancheong in the eastern province of Jiangsu, but commercial production at the plant is to be delayed for “several months to add some facilities,” said Kang Hyun-geun, a company spokesman, by telephone.

“No exact date has been set for commercial production,” Kang said.

Kia’s two Chinese partners – Dongfeng Motor Corp. and Jiangsu Yueda Co. – are “strongly opposing” the delay, Chung was quoted as saying by the Seoul Economic Daily.

However, the Kia spokesman denied any friction with the Chinese partners.

“Unconditional facility investment is not the answer. At stake is how much synergy we can create from the investment,” Chung told the newspaper.

It is difficult for Hyundai and Kia to “gauge their overseas sales this year” as oil prices have jumped and the Korean currency surged against the U.S. dollar, Chung said.

Last week, Hyundai said it will stop production at its car manufacturing plant in the United States for 10 days during the fourth quarter, hit by a rising inventory and falling sales.

It’s the first time that Hyundai has let the U.S. plant idle since it began production in 2005.

Analysts say Hyundai is struggling with tough competition and weak industry demand in the wake of the sub-prime credit crisis in the world’s largest automarket. [Source: Asia Pulse]

2 thoughts on “Kia Motors delays production at new China plant

  1. Hello everyone at the Kia World blog. My anme is Mihcael Choo and I am the International PR Manager for Kia Motors Corporation based in Seoul.

    I’d like to clarfiy for all of you that the above article from Yonhap, which I believed originate from Seoul Economic Daily News, is erroneous. The China plant was completed right on schedule and test produciton has commenced. We expect to be producing the new Cerato at the new plant before the end of th year, as orginally plant.

    Thank for your attention everyone!

  2. Welcome to Kia-world blog Mr. Michael Choo!
    I am glad to see you commenting here and would like to thank you for explaining Seoul Economic Daily News report. This report was a big surprise for me and I just couldn’t belive it, so I am glad to read your explanation!

    We already reported that Kia started a trial run at it’s China plant, therefore it was a little confusing hearing the news about production delay!
    Newspapers make the most of the money on sensational and sometimes shocking news and that’s why they post such reports.

    I hope Kia begins and operates all China operations as on schedule and wish your company best of luck in world’s fastest growing car market! We will sure report on the success Kia will achive!

    Again, I would like to thank you for your attention and explanation at our KIA-WORLD blog!
    Hope to hear you again!

    Miha D. (KIA-WORLD blog owner)

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