Dongfeng Yueda KIA business news

KIA Motors Corp, the Republic of Korea's second-largest carmaker, opened a second factory at its venture in China over the weekend. The move came as the company tries to reverse its sales slump in the world's fastest-growing major car market.

The 6.8 billion yuan (US$919 million) factory, which can make 300,000 vehicles annually, boosts Kia's total capacity in China to 430,000 units, the company said in a statement on Saturday. Kia aims to raise its share of China's car market to 8.3 percent by 2010 from its current share of 1.6 percent.

Kia has lost customers to General Motors Corp, which is investing US$1 billion annually in China, and Toyota Motor Corp, which started construction of a new factory in June, Bloomberg News reported. Seoul-based Kia's sales of locally-made cars in China fell 14.6 percent in the first 10 months, compared with a 24 percent jump in the country's total passenger car sales.

"Kia is losing to American, European and Japanese automakers," said Yu Bing, a Shanghai-based analyst at Pingan Securities Co. "Automakers have to bring out timely new models in order to maintain their position in the Chinese market."

Kia, an affiliate of Hyundai Motor Co, the Republic of Korea's largest carmaker, builds Optima sedans, Sportage sport-utility vehicles and Carnival multipurpose vehicles in the eastern Chinese city of Yancheng, Jiangsu Province. It plans to add one or two new models each year.

The new factory, which has an average automation rate of more than 90 percent, is equipped with the most advanced technologies in the world, according to the statement. Upgraded Cerato sedans and Cerato hatchbacks will be assembled at the plant.

Kia's Chinese venture Dongfeng Yueda Kia Motors Co Ltd is owned by Kia, Dongfeng Motor Corp and Jiangsu Yueda Investment Co. Dongfeng Motor and Jiangsu Yueda each own 25 percent of the venture.

"China's auto market is changing very rapidly and we are facing tough competition," Chung Mong Koo, chairman of Hyundai Motor Co, Kia's parent, told reporters on Saturday in Yancheng. "The new factory prepares the ground for Dongfang Yueda Kia to become one of the mainstream automakers in China."

China's annual economic growth has averaged 9.6 percent over the past five years, making cars affordable to more people. In addition to Toyota's and GM's investments, Volkswagen plans to expand production by 2010.

Kia's loss widened in the third quarter because of a stronger won and slumping sales. It predicts a return to profit next year helped by the introduction of five new or revamped models in Korea, Chief Executive Officer Cho Nam-Hong said in October. The carmaker aims to raise its share of the South Korean market, its most profitable, to 25 percent next year from an expected 22 percent this year, Cho said. It aims to sell 318,000 vehicles domestically in 2008.

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December 10, 2007 – Kia Motors Corp, South Korea's No.2 automaker, officially opened its second factory in China which, the automaker said, will boost its sluggish sales in the fast-growing Chinese auto market, according to a Reuters report.

Located in Yancheng, Jiangsu province, the $919 million plant is built in two years, and it is capable of rolling out 300,000 units per annum at full capacity. Kim Ik-hwan, vice Chairman of Kia said that the new plant will start to make use of an automatic production line and 169 robots in the manufacture ring process.

The second plant will start production of Cerato hatchback and new Cerato in the first phase. Kia also said in its statement that it aimed to produce 200,000 vehicles at its two factories in China by 2008 and 440,000 vehicles by 2010.

For the first 11 months of 2007, Kia has sold 89,712 cars in Chinese market, down 13.8 percent from a year ago

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January 25, 2008 – Dongfeng Yuda Kia, a joint venture between Chinese automaker Dongfeng Group and Korean automaker Kia Motor, plans to launch three models in Chinese market this year.

Besides a hatchback Serato, which was launched in Chinese market this month, Dongfeng Yueda Kia will also launch hatchback Rio and Sportage (2.7 liter engine) in the market later this year.

Last year, Dongfeng Yueda Kia sold 105,000 vehicles, which represents only 52.69 percent of the automaker’s sales target for 2007.

Of all four models made by Dongfeng Yueda Kia, Serato represents 60 percent of the automaker’s total sale last year and it was the only model that experienced sale growth last year.

However, the automaker set a 200,000 sales target in Chinese market this year. To reach this target, the joint venture automaker plans to more popular models: hatchback Rio and Sportage (2.7 Liter engine).

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May 09, 2008 - Dongfeng Yueda Kia Automobile Co will launch three-door Pro-cee'd CUV this July. Both Pro-cee'd three-door and five-door editions are expected to go on sale in China this year.

The automaker also unveiled plans to locally produce a five-door model at its Yancheng plant by the fourth quarter of this year. The three-door Pro-cee'd, which has a more sporty profile than the five-door model, will be sold through import.

Kia's another model - Borrego, which was debut at the Beijing auto show last month, will also be imported by June this year, with its a price tag of 400, 000 yuan ($57,000).

Currently, Kia has five models produced in its Chinese joint venture - Dongfeng Yueda Kia. The joint venture sold 104,127 Kia brand vehicles in China last year.

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December 11, 2008 - After deciding to produce the Kia Cerato and Soul hatchbacks in China next year, Kia Motors and its Chinese partners are discussing about making the Kia's seven-seat Carens MPV model in their joint venture as well, said sina.com today.

"We have been discussing about producing the Kia Carens MPV in China," said an insider of Dongfeng Yueda Kia Auto recently to reporters. The Kia Carens is positioned as a family-use seven-seat MPV, which should be a market segment not fully explored yet in China. The Kia Carens MPV will be made at the second plant of the venture by 2010.

The compact Kia Carens MPV was launched into the Chinese market in 2006 with four models, all equipped with the 2.0L 4-cylinder engine and automated manual transmission (AMT), and priced at 165,000 yuan ($24,000) to 183,000 yuan.

Many automakers are looking to tap the MPV market in China. Fujian Southeast Motor started last month to sell its new MPV model the Mitsubishi Zinger (for 136,800 yuan to 179,800 yuan). The high-end MPV Mazda 8 will go on sale in China in 2009, and Haima Auto will release its Fstar (Fushida) MPV model to the market in early 2009.

Dongfeng Yueda Kia Auto, a joint venture between Dongfeng Motor Corp and Korean Kia Motors, announced in early November it will make and sell the Kia Forte (all-new Kia Cerato) and Soul compact cars in China next year. The upgraded Kia Optima is also likely to be made by the venture.

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