UPDATE 1-Kia Motors says to suspend U.S. plant; shares drop

Sun Mar 18, 2012 11:30pm EDT

* Media report says fire hit parts supplier

* Sorento, Santa Fe SUVs could see production losses -analyst

* Kia says sees little impact on sales

SEOUL, March 19 (Reuters) - South Korean carmaker Kia Motors said on Monday that it would suspend production at its U.S. plant on Monday and Tuesday, after media reported said a fire broke out at a parts supplier.

The news sent shares in Kia and parent Hyundai Motor down on concerns about possible output disruptions.

Kia's U.S. plant in Georgia, with an annual production capacity of 300,000 vehicles, produces the Optima sedan, the Sorento SUV and Hyundai Motor's Santa Fe SUV.

A South Korean media report said on Monday that a fire had struck a Georgia factory operated by Daehan Solution, an unlisted South Korean parts supplier for Kia. An official at Daehan Solution declined to comment.

Kia did not identify the reason for the plant suspension, with a spokesman saying that it would have a limited impact on sales as the facility had an inventory of 1.9 months.

"Production is currently scheduled to resume at 6:30 a.m. EDT on Wednesday, March 21," Kia said in a statement.

Ahn Se-hwan, an analyst at IBK Securities, said the closure could lead to short-term production disruptions for the Santa Fe and Sorento.

Shares in Kia Motors were down 1.9 percent and Hyundai Motor was down 0.7 percent in a wider market that was up 0.3 percent as of 0312 GMT.

Kia, an affiliate of Hyundai Motor, saw its monthly sales jump 37 percent to a new record high in February from a year earlier.