SEOUL -- Kia Motors Corp., South Korea's second-biggest automaker, does not intend to abandon a plan to build a $1.2 billion car plant in Slovakia despite a likely delay in construction, a Kia official said on Thursday.
But the official, who declined to be named, said Kia would press authorities in Slovakia to help get the project moving and avoid land disputes blowing the timing unacceptably off course.
Slovakia's government has approved a plan to expropriate land needed for Kia and its parts supplier Hyundai Mobis and had so far secured around 80 percent of the land.
But the new EU member state will miss the end-August deadline for preparing the site for its largest greenfield investment because some landowners had refused to sell their land at prices offered by the state.
"It's not an option to nullify the plan," the Kia official said by telehpone. "We will seek ways with the Slovakia government to get the plans going as planned."
Construction is scheduled to begin in October with completion due in December 2006.
Slovakian Economy Minister Pavol Rusko had previously warned that expropriation could delay the project by up to nine months because the landowners had the right to challenge such a motion in court.
"The nine-month delay is not acceptable", said the Kia official. "There's not much time to waste. We will consult with the Slovakian government to get started, while the government deals with landowners," the official added.
The land dispute has been dragging on since end-May and the delay has weighed on the Slovak crown as banks have fretted that the South Korean car maker could abandon the project.
Kia Motors and its parent firm Hyundai Motor Co., aim to boost their presence in Europe after success in the United States. Kia wants to start assembling 200,000 units annually at its plant in Slovakia by late 2006.
Shares in Kia Motors rose 1.6 percent to 9,420 won by mid-morning, in line with the broader market's 1.71 percent climb.