730,000 unit build capacity readying for a still expanding Chinese automobile market.
Wayne Gerdes -
CleanMPG - June 30, 2012
A Kia Sportage in the clouds… A profitable CUV that is garnering just as much interest in China as it does here in the US.
Yesterday Kia and its Chinese subsidiary, Dongfeng Yueda broke ground on its third plant in the Yancheng Economic Development Zone (Jiangsu Province) in China. The zone was established in 1992, occupies an area of 33 square miles and is located southeast of Yancheng City, 18-miles from the Yellow Sea to the east. The site of the third manufacturing facility is located just three miles from an already running second Kia manufacturing plant site and will utilize the existing infrastructure to keep overall costs down.
The plant when online and producing at full capacity possibly as soon as late 2014 will have an annual capacity of 300,000 vehicles.
The plant will include a state-of-the-art stamping press, body, painting, assembly and engine module manufacturing and installation plus be home to a technology research center and 1.2 mile high-speed test track.
The plant site was chosen to in the future expand annual capacity by between 100,000 and 400,000 more vehicles to meet the needs of an ever expanding Chinese domestic market.
As reported over the past two years, the still recovering US market lost its rank as the number one auto marketplace in the world to China and there is now no turning back.
Kia US Sales vs. China
2011 was a record-shattering year for Kia Motors America that saw record sales every month, more awards and accolades for its vehicles and the Kia brand than ever before. 2011 marked the 17th straight year of increased market share to an all-time high of 3.8 percent as the company broke its annual sales record with
485,492 vehicles sold. So far in 2012 (through May), thanks in part to the Georgia manufactured Optima and Sportage CUV, sales have reached
237,381 units for an 18.7% year-on-year growth.
Additionally, Kia achieved several important milestones, including a 36.3-percent increase in year-over-year sales; the start of U.S. production of the popular Optima midsize sedan; creation of 1,000 new jobs and the addition of a third shift at Kia Motors Manufacturing Georgia (KMMG).
Kia's unprecedented growth is the direct result of the company's Chief Design officer Peter Schreyer’s influence to provide excellent looking and working automobiles and the hard work of thousands of engineers, managers and scientists the world over who continuously improve the Kia lineup from their manufacture to the display within hundreds of Kia dealerships across the country.
Dongfeng Yueda Kia has also recorded tremendous growth in the Chinese marketplace, tallying sales of
432,518 units in 2011. So far in 2012 (through May), thanks to the locally produced K2 (China-specific version of the B-segment Rio), and Sportage CUV, sales have reached
185,543 units for 16.7% year-on-year growth, which exceeds average industry demand in China of 6.0% for the same period.
Meanwhile, Kia’s Chinese market share has grown from 1.9% in 2007 (18th in the industry) to 3.6% last year (8th in the industry). So far this year, its market share has remained at 3.6% while its industry rank has gained a spot to 7th place in China.
Kia currently has two plants up and running in the Chinese Yancheng Economic Development Zone with a total annual capacity of 430,000 vehicles. This should make us wonder why the US with an even larger and faster growing sales pace will have only half the domestic production capacity and no current plans for expansion vs. China?
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