Kia 2007 Annual Report Download - page 54

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Production
In 2007, global production amounted to 1,369 thousand units, a 7.8% increase from the previous year. Korean plant produced 1,119 thousand units (including
OEM), a decrease of 2.8% over the previous year. High oil prices and environmental regulation led to slack RV demand, decreasing production and sales of RVs such
as Sorento and Sedona(Carnival). Even worse, the production loss of about 23 thousand units occurred due to 90 hour-long labor strikes related with annual wage
negotiations. Meanwhile, overseas plant produced 251 thousand units, up 108.5 % compared to the previous year. The plant in Slovakia, which started the mass
production at the end of 2006, produced 145 thousand units while China plant produced 106 thousand units.
Our global production target for 2008 is 1.69 million units. Korea, China and Slovakia plant will produce 1,215 thousand, 250 thousand and 225 thousand units
respectively.
・Production
CapEx
Total capital expenditures of the company amounted to ￦1,570 billion in 2007, with the ratio of tangible and intangible R&D investment to sales revenue being
4.7%.
Of the ￦994 billion made in domestic investments, 71% or ￦708 billion has been capitalized - ￦397 billion in tangible assets and ￦312 billion in intangible assets.
Tangibles asset investments involve maintenance and investment in new model production facilities. Intangible assets are related to the cost of new model
development. While individual depreciation periods vary according to their asset classification, our average depreciation period is 15 years. Amortization of
intangible assets begins with the mass production of new models and continues for 3 years.
Overseas investment amounted to ￦576 billion: ￦286 billion in China, ￦156 billion in Slovakia, and ￦135 billion in US. Overseas investment for the future will be
on the US plant of which construction is underway and expected to be completed by late 2009.
・R&D Trend (% of Revenue)
054_
Kia Motors Annual Report 2007
Management’s Discussion & Analysis
・CapEx Trend (KRW in billions)
* Parent revenue base
5.9%
4.6% 4.7%
2005 2006 2007
* R&D related expenses included
** CapEx in China includes local partner's burden (50% shares)
2005 2006 2007
1,570
1,709
588
799
1,911
534
949
322
428
576
753
241
Overseas R&D PP&E
1,270,577
1,150,397
120,180
115,465
4,715
2006
1,215,502
1,105,431
110,071
110,071
-
2005 2007
1,369,198
1,118,582
250,616
105,538
145,078
Global Production
Korea Plants
Overseas Plants
China
Slovakia
(Units)
* OEM Production(Picanto - Donghee Automotive) included