Kia Motors said today that it has reached an investment agreement with the Mexico government to build a manufacturing plant in Monterrey in the northeastern state of Nuevo León. Construction planned to begin in late September.
When completed during, the first half of 2016, the plant will add 300,000-units, which will increase Kia’s total global manufacturing capacity to 3.37 million cars per year – 1.69 million vehicles at domestic Korean plants and 1.68 million at overseas plants.
Kia said it plans to produce a range of yet-to-be confirmed compact models at the new plant.
Mexico was chosen as the site for Kia’s next 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 NAFTA- with 40 countries. The U.S. will be an export market.
Kia also says it will use the $1 billion plant to strengthen the brand’s sales presence throughout the entire Central and South America region while freeing up supply from Kia’s domestic plants to address supply shortage issues in other regions of the world.