Korea’s Kia Opens Auto Plant in U.S.

Posted by: Ihlwan Moon on November 17, 2009

While other automakers slash output and close production lines, South Korea’s Kia Motors has just opened a $1 billion plant in Georgia. The new factory, part of Kia’s growing presence in the U.S. market, has an annual capacity of 300,000 vehicles. On Nov. 17, it began rolling out the new Sorento sport utility vehicle, which Kia will sell in America from January.

Kia, controlled by Hyundai Motor, Korea’s largest carmaker, is confident it can increase its U.S. sales by double digits next year. The Korean company will offer four new models, including the completely redesigned Optima sedan and the Sportage crossover. “We are prepared to expand,” declares Thomas Oh, executive vice president in charge of Kia’s America business. Oh predicts U.S. sales of 350,000 vehicles next year, up from a projected 300,000 this year.

The optimism stems from the Korean carmaker’s outstanding performance this year. In the first 10 months, when the industry’s sales fell 25% in the U.S., Kia sold 261,000 vehicles there, up 7.2% from a year earlier. Company officials say Kia’s U.S. market share, which rose to 2.1% last year from 1.9% in 2007, is poised to top 3% this year for the first time. Taking advantage of its strong lineup of small cars and a weak Korean currency, Kia has managed to win customers from General Motors, Toyota and Honda. With the Korean won still about 19% weaker against the greenback than it was at the beginning of last year, Kia’s expansion story isn’t likely to end for a while.

Reader Comments

Interconnect

November 17, 2009 7:46 AM

Mr. Young-Jong Seo and Mr. Sung Eun Chung the world knows Hyundai/Kia success in the US, European markets. Many developing/emerging countries as Pakistan, Afghanistan with growth factors for the still too costly with brand loyalty for brands as Suzuki, Toyota are brand leaders. Kia made wrong decision and came with local distribution/CKD assembly as their first entry swindled the consumers with money and went bankrupt. Lately came Dewan Farooq Motors with Hyundai franchise for Pakistan Afghanistan for assembly Hyundai hatch back CKD production, which halted when the local partner Dewan Farooq Motors went into financial trouble. Again the warranties aren't being honored, parts prices doubled, or not available with franchise. Outsourced dealership/parts closed. Where the consumer will go? Hyundai/Kia should have their own 100% owned CKD/import facility not only to serve the local market, but to take advantage of the FTA/PTA agreements which the country has with China for market access to the Chinese markets, with production/assembly in Pakistan for exports to the large markets as China. Similarly as India now exporting to EU after the treaty ratification with Korea. Kia, Hyundai are important to the markets where they are produced, should have a good image, respect, and market access to the regional and international markets. For further assistance please contact eMail: haroon@supertec.com

fred

November 17, 2009 10:20 AM

Hyundai/Kia Made in America=American Car.

gabe, san diego

November 17, 2009 2:28 PM

It was about time some of those Globalisation effects came back to us,.....

KUEI

November 17, 2009 3:32 PM

"Hyundai/Kia Made in America=American Car."

Don't be fooled by stupidity. Those are american ASSEMBLED cars. The manufacturing is done overseas. A huge difference. Being an american ASSEMBLED car creates a lot less jobs and lower wages than being an american MADE car.

siphandone

November 17, 2009 6:59 PM

I like Sorento, but I did not test-drive it... Instead I just bought 2010 Camry... Next time I will look forward to Kia when it is time to buy a new car... For now, still not trust Korean reliability yet...

Taishan

November 18, 2009 3:14 PM

To KUEI: Maybe, for now, most of the parts are made in S. Korea. However, as S. Korean wages rise, it is very likely more and more of those parts will be made in the US. A few years back, it was not uncommon for the UAW to brand an auto with an American label as foreign and an auto with a foreign label as American. So, it is possible that Korea will use increasing American parts in the coming decade(s). Especially with the falling dollar.

AAA

November 19, 2009 11:45 AM

Taishan, the KIA automotive factory has spun off a huge parts making industry around the KIA plant in Georgia and Alabama, as many Korean and US parts makers have relocated to the area to better serve KIA.

The KIA plant also transformed Westpoint Georgia as the once moribound service industry is now bustling with activity.

How can all these not be positive for Americans, American workers, and American jobs?

Joe

November 19, 2009 1:14 PM

To KUEI - Actually many of the parts are made in the USA. That is why there are so many sub contractors moving into Georgia and Alabama area. I believe even the engine and the transmittion are made in the US.

Taishan

November 28, 2009 2:09 AM

To AAA: Yes, I totally agree. I hadn't realized that KIA had domesticated so many of their parts already. I agree, that many times, foreign labels, such as the KIA autos that is produced in Georgia, is foreign in name only. The rest, parts, engineering support, and assembly, are domestic.

private car services

November 30, 2009 5:34 AM

your site is very nice, very useful for me , i bookmarked your blog

m. max

December 7, 2009 6:45 AM

i all most for got and make it a 4 cycler motor once again PLEASE W / MORE HP AND BETTER FUEL EFisncy i can nt spell it darn it better gas milage please and thnks and do u have one in 2 wd tht set a bout 2 foot higher off the ground i hate lowerider autos they sit to close to the grnd the freaking usa has to many darn pot holes n thts no joke !

jimmy

January 15, 2010 4:46 AM

1. There's a movement to radically change California government, by getting rid of career politicians and chopping their salaries in half. A group known as Citizens for California Reform wants to make the California legislature a part time time job, just like it was until 1966.

shammi

January 16, 2010 11:05 AM

I am gonna buy sorento the next suv, since it's made at home and so most of its parts as well. I did not knew it before, i am convinced.

archebald23

March 17, 2010 1:23 AM

i dont get the whole idea of building plants overseas, would it not just cause more overhead expenses? why not just produce and assemble kia parts in korea then export the made car to other countries, US Per se.

sunrisedatacare

March 27, 2010 1:00 AM

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