DAILY - UPDATED
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]