Kia negotiating to build $1.5B auto plant in Mexico

Fri, 25 Jul 2014

After a string of recent announcements from automakers, Kia may be the next business to break ground on a factory south of the border. The Korean company is reportedly nearly finished with negotiations to build a $1.5-billion plant near the city of Monterrey in the Mexican state of Nuevo Leon. The state's secretary of economic development confirmed the news to Reuters and anticipated talks to be completed in the first two weeks of August. Unnamed insiders also said that the location was aiming for an annual production capacity of 300,000 vehicles.

Rumors from a month ago first suggested the possibility of the new factory. It would reportedly build two models of small cars, and assembly could potentially begin as soon as 21 months after breaking ground. Currently, Kia only has one North American plant, in Georgia, that builds the Sorento and Optima.

In the last few years, Mexico has become of hotbed of North American automobile production. Mazda, Honda and Volkswagen all recently opened new or expanded factories to build cars there. There are even more on the way with a joint venture plant from Mercedes-Benz and Infiniti and BMW's announcement of its own $1 billion undertaking in Mexico.

Autoblog reached out to Kia for official confirmation of the Mexican factory, and the company emailed the following prepared statement to us:

"As one of the world's fastest growing automakers in recent years, Kia Motors Corporation is currently evaluating various options for the establishment of a new overseas manufacturing plant in order to secure future growth for the brand. As a part of these efforts, and to better cope with the ongoing supply shortage situation in the Americas region, Mexico is being considered as a possible location of our next overseas production facility."

By Chris Bruce