SEOUL, April 24 South Korean automaker Kia
Motors denied on Wednesday 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 its sources. Ground would be broken during April to
June this year at the earliest, the report said.
Kia already has one factory in West Point, 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 over three work shifts, and employs more
than 3,000 people. Hyundai also has a U.S. factory in Alabama,
which makes the Sonata sedan and the Elantra compact.
"The report is all groundless," a Kia Motors spokesman said.
A spokeswoman for the Georgia department of economic
development said it had no active project with Kia, but would
support any expansion. West Point Mayor Drew Ferguson said he
did not know of any such plans.
Last November, Kia said it would invest $1.6 billion over 16
years on new machinery for the Georgia plant.
The media report on Wednesday 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
Hyundai and Kia, which were the only major automakers to
increase U.S. sales during the 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. A senior Kia U.S. sales
executive said in January that the automaker wants to boost its
U.S. market share this year.
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 aggressive capacity growth by
the Japanese firm.