Kia 2006 Annual Report Download - page 14

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Our relentless pursuit of
growth & automobile perfection
is building Kia Motors brand
equity in overseas markets.
Location Yancheng, Jiangsu
Capacity 130K(#1), 300K(#2)
Product Rio, Cerato, Optima, Sportage, Carnival, etc.
The Chinese automobile market is the fastest growing market worldwide where the annual car sales
is expected to rise 10 million including 5 million passenger cars in 2010. With the completion of the
second plant in China, Kia Motors will embrace a full line-up production system that boasts small-size
to mid-size passenger cars and RVs like SUVs and minivans. Although the Chinese automobile market
is expected to soar in the future, it is currently standing on a excessive supply by the automakers’
aggressive expansion of production capacity. For prior occupation in the market, the competitors are
continuing to drop the prices and constantly launching new models.
In addition to the successful launching of TianLiMa, the sub-compact sedan and Cerato(‘Spectra’ in
some markets), the compact sedan, Kia Motors is also planning to introduce new models that reflect
Chinese customers’ needs. Especially, we are developing strategic models exclusively for Chinese
customers. And we will continue to strengthen our cost competitiveness including the localization of
procurement.
Construction on the Kia Motors’ China No.2 plant in Yancheng(Jiangsu Province) is scheduled for
completion by the end of 2007. The facility will produce 300,000 units annually and is located 3.5km
from our No.1 plant, located in Yancheng. Dongfeng Yueda Kia plans to invest a total of US$800
million into the project by issuing new shares and borrowing from local lenders. The Chinese
government has promised a range of incentives including tax breaks, provision of land at favorable
prices and building of infrastructure such as roads and railroads.
ANOTHER PLANT IS UNDER CONSTRUCTION IN CHINA TO CAPITALIZE ON
AMAZING GROWTH RATES IN THE NATION.
014
KIA MOTORS 2006 Annual Report