Mexico Confirms $1.5B Kia Plant

2015 Kia Rio 1 photo
Photo: Kia
Recent reports have suggested that Kia is looking to open up shop in Mexico to expand its North American production capacity, and it looks like the South Korean automaker is now one step closer to that achievement. Although there is no official word from Kia just yet, one report is quoting Mexican President Enrique Peña Nieto as saying the $1.5 billion will open in 2016.
According to the LA Times, Mexico’s President Peña Nieto said, "It is the first investment by the Korean auto industry in our country. We celebrate that KIA Motors has decided to join in the success story that we Mexicans are writing."

Kia’s new plant will be located in Pesqueria, Nuevo Leon, but it’s not clear which vehicle the South Korean automaker plans on building there. The recent trend has been for high-volume small cars to be built in Mexico for export, and this will likely be the case for Kia, too, as the factory is said to have an annual production capacity of some 300,000 units.

Currently, General Motors, Ford, Chrysler, Honda, Mazda, Nissan and Volkswagen all currently produce vehicles in Mexico for the North American market, which have helped make our neighbor to the south the eight largest auto-production nation in the world and the fourth largest exporter. President Peña Nieto said the Mexican vehicle production is up 7.5 percent on the year so far, while exports (most of which to the U.S.) are up 11.2 percent.

With these numbers, Mexico accounts for 18 percent of total vehicle production in North America, and by the end of the decade – when plants are online from Kia, BMW, Mercedes-Benz and potentially other automakers – that figure could climb to as high as 25 percent.

Of course, this news does come on the heels of today’s announcement from GM that the next-gen Cadillac SRX would move from its current assembly plant in Ramos Arizpe, Mexico to GM’s Spring Hill, TN plant, but GM did not say what, if any, model will fill the SRX’s capacity in Mexico. Through July, Cadillac sold around 33,000 SRX crossovers.
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