Kia in talks with Mexico over new site in Nuevo Leon

Article by Christian A., on July 24, 2014

Kia Motors Corp. is holding discussions with Mexico for plans for at least $1.5-billion new auto assembly site at the state of Nuevo Leon. According to Rolando Zubiran, secretary of economic development in Nuevo Leon, disclosed that talks over the site were ongoing way between the state, the Mexican federal government and Kia.

Zubiran remarked that Nuevo Leon is hoping that talks would be concluded in the first two weeks of August. According to people privy with the matter, the Nuevo Leon site – to be built at the city of Monterrey -- will be able to build around 300,000 vehicles.

Zubiran remarked that details of the agreement were still being discussed. Reuters, citing sources in South Korea, reported that the site will initially build two small cars.

The Nuevo Leon site is expected to help Kia meet increasing demand in the United States, complementing production of its sole plant in the country. Likewise, the site located in West Point, Ga., is being shared between Kia and affiliate with Hyundai.

Once the deal materializes, Kia would join Honda Motor Co. and Mazda Motor Corp. as some carmakers building assembly site in Mexico for smaller light vehicles.

The site would be the latest in a series of major investments announced or being done by global carmakers in Mexico in recent months, hoping to benefit from the country’s proximity and free-trade access to the US, low wages, and growing industrial base.

A person privy with the talks said Kia’s assembly site could pave way for South Korea and Mexico to resume stalled bilateral free trade talks. [source: automotive news - sub. required]

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