Car Production in Mexico
Kia Motors is building a new factory in Mexico by investing US$1 billion to manufacture compact cars from 2016. The company is expecting that it will be able to increase its volume of supply to the North and Latin American markets while exporting 30,000 cars on a non-tariff basis from Korea and boosting domestic production by 650 billion won (US$640 million).
Kia Motors announced on August 28 that it signed the investment contract with the state of Nuevo Leon on the previous day. The signing ceremony was attended by Mexican President Enrique Pena Nieto and many more. The annual capacity of the new plant is 300,000 units, and the groundbreaking is scheduled for late September.
Once the construction is completed, Kia Motors’ annual production capacity increases to 3.37 million units, 1.69 million in Korea and 1.68 million abroad. The location of the plant is just 200 km away from Texas, and allows the tariff to be reduced by means of local production and the North American Free Trade Agreement.
The annual automobile demand reaches one million cars in Mexico. GM, Volkswagen, Toyota, Nissan and the like are already running their manufacturing facilities in the country.