(Adds details, quote from official)
MEXICO CITY, July 22 South Korean automaker Kia
Motors Corp is in talks with Mexico to open a new,
$1.5 billion auto plant, officials of the northern state of
Nuevo Leon said on Tuesday.
Rolando Zubiran, secretary of economic development in Nuevo
Leon, said negotiations on the plant were under way and involved
Nuevo Leon, the Mexican federal government and Kia, an
affiliate of Hyundai Motor Co.
"It's more than $1.5 billion," Zubiran said, referring to
the planned investment. He added that Nuevo Leon hoped the deal
would be concluded during the first two weeks of August.
The plant would have an annual capacity of 300,000 cars and
be built on the northeastern fringe of the city of Monterrey,
according to several people familiar with the matter, who spoke
on condition of anonymity.
Zubiran said details were still being discussed.
Sources in South Korea previously told Reuters that the
plant will initially begin producing two small cars. The factory
could help meet demand in the United States, where Kia has just
One person familiar with the negotiations said the plant
could pave the way for Korea and Mexico to resume stalled
bilateral free trade talks.
The Kia plant would be the latest in a series of major
investments by global automakers in Mexico in recent months as
they take advantage of the country's growing industrial base and
tariff-free access to the U.S. market.
Earlier this month, German luxury car maker BMW
announced a $1 billion Mexican plant investment.
(Reporting by Dave Graham, Hyunjoo Jin, Paul Lienert and
Gabriel Stargardter; Editing by Steve Olofsky)