Kia In Talks With Mexican Officials Over $1.5B Nuevo Leon Plant

by Cameron Aubernon

July 28th, 2014 12:52 AM

kia in talks with mexican officials over 1 5b nuevo leon plant

With the need to increase supply to meet U.S. demand, Kia is in talks with Mexican officials about building a new factory in the country.

Reuters reports the $1.5 billion facility would pump out 300,000 units annually, and would be located in Monterrey. The output would consist of two small vehicles to start, augmenting the output at Kia’s sole plant in the Southeastern United States.

Nuevo Leon secretary of economic development Rolando Zubrian, along with other state and federal officials, began talks last week with the automaker, and hopes a deal would be made sometime during the first two weeks of August. The plant may also pave the path toward a resumption of bilateral free trade negotiations between South Korea and Mexico.

#CapitalInvestments #FactoryConstruction #Kia #Mexico #Monterrey #NuevoLeon

Comments

Join the conversation

16 comments

Challenger2012 on Jul 28, 2014

This says it all,” With the need to increase supply to meet U.S. demand, Kia is in talks with Mexican officials about building a new factory in the country.” Another step in the race to the bottom of the barrel concerning wages. If Kia finds a need for more production to satisfy auto demand in the USA, then why not build or expand a plant in the USA? Kia does not seem to have a problem selling cars here, it seems building cars here is the problem.

Like Reply
- See 3 previous
- Thelaine on Jul 28, 2014
  
  UAW?
  
  Like
- Strafer on Jul 28, 2014
  
  @thelaine NAFTA?
  
  Like
- Bd2 on Jul 28, 2014
  
  Unlike Hyundai, Kia does not have a plant in Brazil and Mexican production would not get hit by an import tariff like a vehicle manufactured in the US. Same goes for the EU market where Mexican built models would not be hit by the hefty 10% EU auto tariff. Also, now that Hyundai has started to sell in Mexico under their own brand, wouldn't be surprised if Kia built a model for Hyundai (like how they build the Santa Fe Sport at their GA factory). Basically, almost all the automakers build their small models in Mexico (or are planning to do so) - the one exception is GM which builds the subcompact Sonic in the US. Wonder what the model choices will be (supposedly 2 at the start) - the Soul seems a likely choice since its largest market by far is the US (might see a Soul-based variant). Forte sales in the US have been hindered by lack of supply, but can see Kia choose the next gen Sportage or even the smaller CUV it's developing.
  
  Like
- CJinSD on Jul 30, 2014
  
  @thelaine NLRB?
  
  Like
Cdotson on Jul 28, 2014

While a Mexican factory would indeed augment Kia's North American production output, I don't think it's entirely truthful to state that building two small cars in Mexico would augment the output of the West Point, GA factory that builds Optimas and Sorentos (not small cars).

Like Reply
- Kyree on Jul 28, 2014
  
  Right. My grandmother bought one of these 2014 Souls in May, and hers has a VIN beginning with a K, indicating that it was built in Korea. I'm guessing that Kia would have a better competitive edge if it were built somewhere in this region.
  
  Like
Slavuta on Jul 28, 2014

I will not say anything original. If the car is made in Mexico I'm not buying it.

Like Reply
- See 6 previous
- Marcus36 on Jul 28, 2014
  
  Why not?...if people are willing to pay 2 to 3 times more money for a Corvette made in rural KY or a BMW or MB made in Rural Eastern Europe, why not a Mexican built sub compact car?
  
  Like
- Bd2 on Jul 28, 2014
  
  @Marcus36 Don't forget - MB, BMW and Audi will all be building vehicles in Mexico.
  
  Like
- Slavuta on Jul 28, 2014
  
  @Marcus36 Because I don't trust Mexican workmanship. They don't have culture of Japanese worker. There are indicators that when a model moves from Japan to be assembled elsewhere, the % of problems increases drastically.
  
  Like
- Racer-esq. on Jul 28, 2014
  
  @slavuta Good luck getting a Kia made in Japan.
  
  Like
- Charliej on Jul 28, 2014
  
  Slavuta, I have a 2005 PT Cruiser. Bought new in February 2005. It is now nine years old. It has been remarkably reliable. The Goodyear tires were garbage, but the rest of the car seems to be very well made. It was made in Chrysler's plant in Saltillo, Mexico. Personally, I would have no trouble buying another made in Mexico car, except I keep cars for a very long time. My last new car a 1990 Acura Legend, I drove it for sixteen years. That got me eleven years of no car payments. The PT has been paid off for four years now. I think Mexican quality is pretty good.
  
  Like
- Marcus36 on Jul 30, 2014
  
  @slavuta Because I don’t trust Mexican workmanship. Really? no kidding?....all the big automotive manufacturers do so even the luxury ones, so maybe they know something you don't. They don’t have culture of Japanese worker. Nobody does, the only ones that come close are the Germans and that is it.
  
  Like
- VoGo on Jul 30, 2014
  
  @Marcus36 Slavuta, Maybe you should consider learning about Mexico before you write this garbage and get labeled a racist. Mexico boasts one of the best educational systems for engineers in the world. Mexico ranks first globally for the number of hours worked by employees. There is a thriving middle class focused on education and hard work. As others pointed out, nearly every major auto manufacturer already has a thriving plant in Mexico, or is building one. If you go to Mexico City and see the business community first hand, you'll get a much stronger view of reality than the usual US media portrayals of gardeners and undocumented workers.
  
  Like
Mechaman on Jul 30, 2014

I ain't surprised at KIA needing more production. I got a laugh at AOL Autos claiming that the Optima is 'overlooked'. Really? Here in Chicago, if KIA isn't building them, the cars may be breeding. Ubiquitous is an understatement ..

Like Reply