Kia Motors Corp., South Korea's second-largest automaker, announced Monday it will set up its first U.S. plant in West Point, Georgia, near the Alabama border.
The $1.2 billion facility, is expected to produce 300,000 vehicles per year at maximum capacity, Kia said. The Korean carmaker also said that five to six auto suppliers are expected to set up nearby, resulting in the creation of an additional 2,000 jobs. Production will begin in 2009.
Proximity to the Hyundai site — combined with a $258 million incentive package from the state — helped sway Kia, away from contending Mississippi and Tennessee, Georgia state officials said.
Georgia has been hit hard by decisions at Ford Motor Co. and General Motors Corp. to close their plants in the state — largely due to increasing competition from Asian automakers.
Kia, maker of the Optima and Amanti midsize sedans, the small-size Picanto and the Sorento midsize SUV, is an affiliate of South Korea's largest carmaker, Hyundai Motor Co., which has a factory in Montgomery, Alabama, 120 kilometers (75 miles) away. The Korean carmaker expects its sales in the United States and Canada to increase 15 percent to 350,000 vehicles in 2006, and grow further to 800,000 by 2010.
The company said that Kia Motors America posted record sales of 20,719 vehicles for the month of February, and is 3.2 percent ahead of its record setting 2005 sales pace.
In January Kia said its 2005 net profit rose 2.9 percent to 680.9 billion won ($696.5 million) as revenue gained 4.6 percent to 16 trillion won ($16.4 billion).
Kia sold 1.27 million vehicles worldwide in 2005, 13.9 percent more than the year before.