Friday, June 27th, 2014
SEOUL, KOREA - The share price of Kia Motors is on the rise on the news that the company decided to expand the capacity of its assembly plant in Mexico. At 9:09 am on June 26, the shares of Kia Motors were traded at 55,800 won, up 2.39 percent (1,300 won) from the previous day's 54,500 won. The company will soon sign an agreement with the state government of Nuevo Leon to build a production line capable of producing 300,000 cars a year in Monterrey, the capital and largest city of the northeastern state.
Lee Sang-hyun, NH Nonghyup Securities analyst, said, "The construction of a new plant in Mexico will push Kia's share price up as it would help the company improve long-term competitiveness. The global capacity utilization for Kia Motors has reached more than 95 percent and it is expected to lose the share in major markets unless it aggressively increase the capacity from this year or next.
Once the Mexico plant is up and running, Kia Motors will have an annual capacity of 650,000 cars in North America including the 350,000 units in its Georgia (U.S.) plant. According to a Kia official, the preparation for the plant construction has almost finished. The construction will begin late this year and the plant will be operational by 2016.
SOURCE : The Korea Economic Daily