Kia Motors on Wednesday officially opened a new manufacturing plant in Mexico that will be served by Kansas City Southern de Mexico S.A.de C.V. It is also anticipated to boost the company’s yearly global capacity to 3.6 million vehicles annually.
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Kia Motors began building the Mexico plant in 2014 as part of efforts to expand its market presence in Mexico and in North America.
Hyundai Motor Group Chairman Chung Mong-koo, second from left, and Ildefonso Guajardo Villareal, Mexico’s Secretary of Economy, left, sign a the hood of a Kia Motors’ K3 also known as the Forte, during a ceremony celebrating the opening of Kia’s plant in Pesqueria, Nuevo Leon Wednesday.
Since President Enrique Peña Nieto took office in late 2012, five major vehicle assemblers have set up shop in Mexico, helping the country to attract foreign direct investment totaling $120 billion, Guajardo recalled. The Mexico plant’s annual production is Kia’s second-largest after its plant in Yancheng, China, whose annual production amounts to 890,000 units. When combined with the plants of Hyundai-branded vehicles, the South Korean automotive group has now 17 plants around the world.
“In addition to supplying the local Mexican market, 80 percent of the facility’s production is destined for numerous other countries in the region, including the USA and other Latin American markets”, the company’s official said.
By the end of 2017, approximately 14,000 workers will be employed by the Kia Motors Mexico plant and supplier firms.
Since May of this year, the plant has been manufacturing Kia’s compact sedan K3, also known as Forte in the overseas market. An estimated 80 percent of the vehicles manufactured at the Mexican plant will be exported, specifically to the United States.
Mexico is attractive to automakers because it is adjacent to the USA, the second-largest automotive market after China, with 17.4 million new cars purchased previous year.
Cheap labor is another attraction. The Korean carmaker, which is also the sister company of Korea’s largest vehicle maker Hyundai Motor Co., signed an investment agreement to build a manufacturing facility in Mexico in August 2014.
The Mexican automotive market has been enjoying an average 10 percent annual growth since 2010 and became the second-largest auto market in Latin America a year ago after 1.3 million new vehicles were sold.
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Kia Motors sold 5,510 cars there in July, up 260 percent from the same month previous year. The largest market in that region is Brazil. Kia Motors aims to sell 55,000 vehicles in Mexico this year, taking up 3.5 percent of the market share.
