South Koreas' giant automaker signs an agreement to build a 300,000 unit capacity plant by 2014.
Kia production line Image: Kia Motors |
In order to keep up with massive local demand, Korean automaker Kia Motors Corp. has signed an agreement to build its third plant in China.
The plant will be based in Yancheng, Jiangsu province, and should be ready by the second half of 2014.
Once completed, the new joint-venture plant will boost Kia's annual Chinese capacity to 730,000 vehicles.
Dongfeng Yueda Kia Autmobile Co. will start the project early next year. The factory is part of the joint venture between Kia, Dongfeng Motor Corp and Jiangsu Yueda Investment Co. Kia is aiming at a stated sales target of 430,00 units in China by the end of the year.
Meanwhile, China's leading truck maker Beiqi Foton Motor Co. has announced its plans to invest 2.47 billion yuan ($389 million) in a plant in India, the world's fourth-largest commercial vehicle market. The company's board of directors has approved the deal to set up Foton Motors Manufacturing India Plc in the state of Maharashtra, west India. The plant will have an initial output capacity of 96,000 vehicles, which will be later increased to 120,000 units, and should begin operations by 2013.
The stiff 24% tariff on all imported vehicles makes local sourcing and manufacturing crucial for Beiqi Foton if they are to carve out a share of the developing Indian market, which according to a statement released by the company “resembles the Chinese market 10 years ago and has enormous room for growth.”
Although industry giant Tata Motors currently has a 70% share in the market, with less than ten companies sharing the rest, Foton claims they will be a strong competitor to Tata in terms of product quality. The Chinese truck maker also has plans to build new plants in Russia, Brazil, Mexico and Indonesia before 2015.