Kia 2015 Annual Report Download - page 27

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Will the Mexico plant
drive Kia Motors’
growth?
The Mexico plant is an optimal base for
further advances into overseas markets.
It has competitive labor costs, strong
productivity, outstanding technology and
facilities, and an excellent location. The
plant is situated on an area spanning
around 500 ha, including a partner
site, and its cutting-edge production
technology will enable it to manufacture
one vehicle every 53 seconds. It will
produce more than 300,000 units
annually and account for around 10% of
Kia Motors’ global production, beginning
with the production of 105,000 units of
the Forte (K3) in 2016.
Mexico has a Free Trade Agreement (FTA)
with around 50 countries across the globe,
including the North American Free Trade
Agreement (NAFTA). In addition, Mexico is
one of 12 member countries of the Trans-
Pacific Partnership signed in October 2015.
With the U.S. as a neighbor, the Mexico
plant is perfect as a global production and
export base. Mass production of finished
cars at our plant in Mexico will therefore
play a key role in strengthening the global
competitiveness of Kia Motors.
What particular value
can the Mexico plant
generate?
The Mexico plant will help Kia Motors
create shared value with both Korean
exporters and local communities in
Mexico. The plant project has forged a
new path for Korean export companies,
with 14 Korean suppliers entering
the Mexican market alongside us,
thus creating new opportunities for
Korea’s export industry, which has been
stagnating in recent years.
What is the significance
of the Mexico plant for
Kia Motors?
The Mexico plant is more than just one
of our overseas plants, as it is central to
our future growth plans. At the moment,
Kia Motors has production bases in
North America, Europe and Asia, but
not in Central & South America. With
the Central & South American market
growing rapidly, the Mexico plant will
serve as a strategic export base to cover
the Americas and enhance our overall
global competitiveness.
Once operations at the Mexico plant
begin, Kia Motors will have a global
production capacity of 3.37 million
units, comprised of 1.69 million units in
domestic capacity and 1.68 million units in
overseas capacity. On the retail front, we
have gone from an initial 21 dealerships
in Mexico to 48 by the end of 2015, and
we expect to have 70 dealerships in place
by 2016 so that Mexican consumers
can enjoy a comprehensive sales and
maintenance network. In addition,
our innovative marketing activities will
strengthen our position in Mexico while
enhancing our reputation as a truly global
automotive company.
Kia Motors Slovakia
GLOBAL GROWTH MOMENTUM
Kia Motors’ new plant in Mexico began pilot operations in November
2015, and mass production is targeted to commence in May 2016.
Mexico is the fourth overseas country in which we have opened
a plant, following our three plants in China, Kia Motors Slovakia in
Europe, and Kia Motors Manufacturing Georgia in the U.S. The
Mexico plant will increase our market position in the Mexican market,
where we have begun to make inroads, and will also serve an export
base for the Central & South American and North American markets.
Dongfeng Yueda Kia Motors Co, Ltd. (DYK)
● No. 1 Plant ● No. 2 Plant ● No. 3 Plant
25
ANNUAL REPORT 2015 |