In light of high demand in the United States for its offerings, Kia will build its first Mexican plant in Monterrey to help bring additional capacity to North America.
Reuters reports the factory will open 21 months after groundbreaking, supplying a total of 300,000 vehicles annually to the United States. Production will focus on Kia’s compacts — the Forte and Rio — at first before taking on work from the brand’s sole U.S. factory in Georgia, where the Optima, Sorento and Hyundai Santa Fe are assembled, and from Hyundai’s Alabama plant, where the Sonata and Elantra are built. No word was given on when the first shovels would break the earth.
Aside from supply-and-demand issues in the U.S., Kia is likely building the Monterrey plant — to go with Hyundai’s production expansion into Chongqing, China — in order to maintain its market share around the globe. The duo together hold fifth place in the global auto sales race, a position it could lose by 2016 if no more capacity is added, according to Korea Investment & Securities auto analyst Suh Sung-moon.
The capacity limit was unofficially put in place by Hyundai/Kia chair Chung Mong-koo over two years ago, fearing his two brands would end up like Toyota in the 2000s if they expanded as aggressively as had the Japanese automaker.