SEOUL, South Korea (AP) -- Kia Motors Corp., South Korea's second-largest automaker, said Wednesday that construction of its first U.S. plant is proceeding on schedule and will open as planned late next year.
"No change has been made to our schedule to complete the plant by the end of November and to start production in December" of 2009, company spokesman Michael Choo said.
South Korea's Yonhap news agency reported Wednesday, citing a source it did not identify, that Kia could delay the start of manufacturing at the factory in West Point, Georgia because of rising inventories resulting from the slowing global economy.
Kia announced in 2006 it would build the facility at a cost of $1.2 billion, employ 2,500 workers and start production in 2009. The plant is expected to produce 300,000 vehicles per year at maximum capacity.
Kia is an affiliate of Hyundai Motor Co., South Korea's biggest automaker. Together, they form the world's fifth-largest automotive group. Both companies have been expanding aggressively overseas in recent years. Hyundai operates a U.S. factory in nearby Alabama.
Global automakers are being hit hard by collapsing demand for vehicles amid the global economic slowdown.
Hyundai and Kia are taking steps to pare production in South Korea by cutting some overtime and weekend shifts during December.
GM Daewoo Auto & Technology Co., the South Korean unit of General Motors Corp., temporarily stooped production Monday at one of its four domestic plants. The three other facilities will close on Dec. 22. All will reopen on Jan. 5. GM Daewoo is South Korea's third-largest automaker.