Kia scales back sales goals in U.S.

Automaker to export vehicles from new Georgia plant

WEST POINT, Ga. -- Kia Motors Corp. has scaled back its U.S. sales expectations and as a result will use its U.S. plant as an export base for markets in Latin America.

Kia had targeted U.S. sales of 800,000 vehicles a year in 2010, but now expects sales of about 650,000 in 2010, Chung Eui Sun, Kia CEO, said here today at the plant's groundbreaking.

Chung and his father, Hyundai-Kia Group Chairman Chung Mong Koo, lifted shovels of sand to break ground on Kia's first U.S. plant here today. The younger Chung said it has not been determined how many of the plant's 300,000 vehicles a year would be shipped out of the United States.

The vehicles will go markets in Central and South America, possibly including Mexico. Kia does not sell vehicles in Mexico now.

Kia has said that the Georgia factory will be critical to reaching its plan to double its current U.S. sales volume in 2010.

Len Hunt, Kia Motors America executive vice president and COO, said the brand has posted sales of about 222,000 so far this year and hopes to reach 300,000 by year-end.

"It will be a bit of a stretch, but the 300,000 target would be psychologically important," Hunt said. "The dealers are really excited that Kia is investing in America, because that's what we're continually asking them to do. It says to them that we're here to stay."

The automaker will spend $1 billion to open the plant .

Kia CEO Chung said today he had hoped to begin production in September 2009, but is now shooting for November 2009.

Chung said that Kia has not decided what vehicles it will build in Georgia. Despite the ceremonial groundbreaking, the company also has not yet selected a construction management firm to handle the project, he said.

The company delayed the groundbreaking six months because of a criminal investigation of the elder Chung in Korea related to allegations of political bribery. Chung was jailed part of the year, which prevented the automaker from making decisions about the Georgia project.

You may e-mail Lindsay Chappell at lchappell@crain.com

You can reach Lindsay Chappell at lchappell@crain.com.


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