South Korean carmaker Kia Motors dismissed a report by local newspaper Financial News that it is planning to construct a new plant in the United States by 2014 to expand its capacity, which is said to not be enough to boost its sales growth in the country. The newspaper reported Wednesday that Hyundai Motor Group, which includes Kia Motors and Hyundai Motors, is holding talks with Georgia state officials to build a new plant, "KMMG 2," that could produce up to 150,000 vehicles annually.
The South Korean newspaper added in its report that groundbreaking ceremonies for the plant will be between April and June 2013 at the earliest. Kia operates a plant in West Point, Georgia that has a production capacity of 360,000 vehicles.
The West Point site, manned by over 3,000 workers, builds the Optima sedan, Sorento sport utility vehicle (SUV) and Hyundai's Santa Fe SUV over three work shifts. Hyundai, on the other hand, operates a plant in Alabama, producing the Sonata sedan and the Elantra compact.
A Kia Motors spokesman said the report of Financial New is “all groundless.” A spokeswoman for the Georgia department of economic development disclosed that it has no active project with Kia, but that it is willing to support an expansion. West Point Mayor Drew Ferguson denied knowing of any such plans.
In November 2012, Kia said it would make $1.6 billion in investments over 16 years on new machinery for the Georgia site. According to Financial News’ report, Kia internally decided in 2010 to construct the new production facilities in Georgia, but postponed the plan due to global economic uncertainty. Hyundai and Kia are struggling to stave off falling sales and market share in the US, which are mainly caused by stretched production capacity and increasing competition.