Kia’s overseas production passes one million mark

Fourteen years after Kia Motors started exporting knock-down vehicles to Taiwan and the Philippines, Kia Motors has shipped its one millionth kit this month.

Kia currently produces nine different vehicles on a knockdown basis in twelve countries worldwide, from Malaysia to Russia. Total knockdown sales in 2002 reached 137,410 units, representing 23.4 percent of total exports. Knockdown sales for the first five months of 2003 reached 94,918 units, a 73.5 percent increase over the same period last year. Total exports over the same period increased by 36.7 percent to 303,l906 units.

Yong-Mo Ahn, Director of Kia’s global knock-down operation, says, "Kia is a global manufacturer with an increasing focus on the international market. We expect our knockdown program to reach 190,000 units in 2003, reflecting the strength of our China operation."

Knockdown vehicles are cars that are exported from factories in Korea as kits for assembly at plants overseas. In the past, Kia has focused its knock-down activities on small cars like the Sephia and the Pride.

However, the company is now adding higher margin vehicles to the program, most recently with agreements to assemble the popular Carnival/Sedona MPV in Thailand and Malaysia.

The knock-down market allows companies to benefit from increased price competitiveness in local markets and to continue production of vehicles discontinued in the home country. More than 120,000 units of the Kia Pride of the global-selling small car are manufactured each year in six countries, for example, despite the fact that production of the car was discontinued in Korea in 1999.

The newest poster child for Kia’s knockdown program is the Tianlima small sedan, produced in China by a joint venture comprising Kia, Yueda and Dong-Feng. Exports of the Tianlima have reached 28,680 units since the vehicle was introduced in November last year.

"The knockdown program increases our penetration in key local markets and paves the way for full scale overseas manufacturing in the future," says Ahn.

"The knockdown program is growing very quickly," he adds. "We reached the 500,000 mark ten years after we began operations in this sector of the market. We passed the one million mark four years later."

Kia Motors’ total capacity, including knock-downs, is 1,150,000 cars per year. Founded in 1944, Kia Motors Corporation is Korea’s oldest manufacturer of automobiles. A part of Hyundai Automobile Group, the company currently sells more than one million vehicles per year worldwide and maintains a network of distributors that covers 190 countries. Kia Motors is the major sponsor of the Australian Tennis Open and the international sponsor of the Davis Cup for the Euro/Africa Zone.