SEOUL, April 24 South Korean automaker Kia
Motors on Wednesday denied a media report that it
aims to build a new plant in the United States by 2014 to ease a
capacity shortage that has put a brake on its stellar sales
growth in a key market.
South Korean newspaper Financial News said on Wednesday that
Hyundai Motor Group, which includes Kia Motors and affiliate
Hyundai Motors, is in talks with Georgia state
officials to construct the new plant, "KMMG 2" with an output
capacity of as many as 150,000 vehicles a year, without
identifying sources. Ground would be broken during April to June
this year at the earliest, the report said.
Kia already has one factory in Georgia with a manufacturing
capacity of 360,000 vehicles. That plant produces the Optima
sedan, Sorento sport utility vehicle (SUV) and Hyundai's Santa
Fe SUV. Hyundai also has one U.S. factory in Alabama, which
makes the Sonata sedan and the Elantra compact.
"The report is all groundless," a Kia Motors spokesman said.
The report said that in 2010, Kia internally decided to
build the new production facilities in Georgia, but held off the
plan because of the global economic uncertainty.
Hyundai and Kia, which were the only major automakers to
increase U.S. sales during the 2009 global economic downturn,
have been grappling with falling U.S. sales and market share in
recent months, crippled by stretched production capacity and
rising competition from rivals such as Toyota Motor.
The combined U.S. sales of Hyundai and Kia fell 3 percent
from January to March this year from a year earlier,
underperforming the recovering market.
Chung Mong-koo, chairman of Hyundai Motor Group, the world's
fifth-biggest automaker, has slowed capacity addition in the
past couple of years, aware that Toyota's massive recall crisis
in 2009/10 was partly a result of the Japanese firm having
aggressively grown capacity.