Kia Motors officially opened its new production facility in Pesquería Mexico today at a ceremony attended by more than 500 people. Construction of the northern Mexican state of Nuevo Léon – with easy access to the U.S., began in October 2014. Production actually began in May 2016, with the Mexico plant providing the company with the compact C-segment Kia Forte, known as ‘Cerato’ in some markets. (See Kia Motors to Build $1 Billion Plant in Mexico)
Beginning of 2017, the plant will produce the all-new fourth generation sub-compact B-segment Rio, which will have its world premiere on 29 September in Paris at the 2016 Mondial de l’Automobile. Total planning volume is now said to be 400,000 units, up by more than 30% from initial estimates.
Kia’s sixth overseas production base represents a claimed investment by Kia and suppliers of US$3 billion. About 14,000 jobs are going to Mexico by the end of 2017 at the expense of U.S. autoworkers because the U.S. will be an export market.
NAFTA – that giant sucking sound in the words of former presidential candidate Ross Perot – is part of the U.S. presidential campaign. Candidate (clown-dedate?) Donald Trump is threatening to put a 37.5% tariff on Mexican auto imports. Trump has singled out Ford Motor for moving jobs to Mexico, but all U.S. automakers are taking advantage of the one-sided deal. No word from Trump thus far about U.S. production – more than 2 million units annual – that is exported from the U.S.
VIP List – No U.S. Dignitaries. No Surprise
The Kia ceremony, which took place in the plant’s new assembly shop, was attended by Mexico’s Secretary of Economy, Ildefonso Guajardo Villareal; the Nuevo Léon State Governor, Jaime Rodríguez Calderón; and the Mayor of Pesqueria, Miguel Ángel Lozano Munguía. The delegation of around 100 visitors from Korea included Hyundai Motor Group Chairman Mong-Koo Chung and Kia Motors Corporation Vice Chairman and CEO Hyoung-Keun Lee.
Absent was former Treasury Minister, Luis Videgaray, the cabinet member who was fired for arranging the Trump Mexican visit that embarrassed Mexican President Enrique Peña Nieto. Videgaray, of course has insider connections to the finance industry, and the trio – Trump, Peña Nieto, and Videgaray can fairly be described as dislike, if not loathed, locally. All you need is Hillary Clinton in the mix – also invited to Mexico – for a Grand Slam with foul balls, so to speak, on base.
“The new plant here in Mexico represents the next step in Kia Motors’ ambition to become one of the world’s leading automakers,” said Mong-Koo Chung, Chairman of Hyundai Motor Group, during his speech at the ceremony. “The innovative design and world-class quality possessed by the cars produced at the Kia Motors Mexico plant will be embraced by our valued customers not only here in Mexico but also in export-bound countries of Latin America and North America.”
Mexico was chosen as the site for Kia’s latest overseas plant because it is one of the remaining major global markets where Kia does not have a sales presence. Mexico imposes high tariffs on imported cars from Korea. Mexico has many trade agreements – such as the controversial NAFTA- with 40 countries.