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Puerto Vallarta News NetworkNews Around the Republic of Mexico 

Kia Preparing Further U.S. Expansion with Mexico Plant

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January 26, 2016

South Korean automaker Kia Motors' first assembly plant in Mexico will start operating in the city of Monterrey in May or June. That facility will assemble the new Forte 2017 models for the U.S. market.

Monterrey, Mexico - South Korean automaker Kia Motors is preparing the next phase of its U.S. expansion with the recent unveiling of a luxury SUV concept and the upcoming launch of its first assembly plant in Mexico, a company executive told EFE here Saturday.

The Telluride, a premium large SUV concept with three rows of seating and a special focus on comfort, was Kia's main vehicle introduction at the North American International Auto Show, a major industry event held in January in Detroit.

Although the Telluride is merely conceptual and under normal industry timeframes would not become a reality for around four or five years, it serves as an excellent indicator of where the South Korean brand - a compelling success story in recent years - is heading.

The concept is based on the Sorento platform, the largest Kia SUV currently in U.S. showrooms and one of the South Korean automaker's most successful models.

Kia sold a total of 116,249 Sorento vehicles last year in the United States, 12.5 percent more than in 2014. That model was the automaker's third-biggest seller in the U.S. market, trailing only its Optima sedan and the Soul.

Kia, which unveiled its fourth-generation Sorento in January 2015, had detected a clear market trend. "The previous generation of the Sorento was really the biggest success story in our history," Orth Hedrick, vice president of product planning at Kia Motors America, told EFE on Saturday.

"During the launch of that vehicle, we discovered that the Sorento was attracting a very large number of more affluent families and individuals. And it was clear that the interior needed to be more luxurious and refined, with more features," he added.

"Now, the better-equipped Sorento, with a V6 engine and a third row of seats, is having extraordinary results. In some U.S. markets, it represents between 40 and 60 percent of our sales, which means we're attracting wealthier buyers," Hedrick said.

The Telluride is based on Sorento's platform, although it is bigger and more powerful, combining a 3.5-liter, 270-horsepower V6 engine with an electric power train that produces an additional 130 horsepower. "All of that is packaged in a very masculine exterior that expresses confidence and daring. The Telluride is the natural evolution for accommodating our customer base, whose purchasing power is rising, and responding to the new tastes of drivers who prefer SUVs to large sedans," Hedrick said.

But even as it looks to the future with the Telluride, Kia also is prepared to meet the growing U.S. demand for smaller automobiles.

Kia unveiled at the NAIAS in Detroit the latest versions of its four-door Forte compact sedan and five-door Forte5 hatchback, 78,919 units of which were sold last year in the United States.

Until now, Kia had placed limited emphasis on the Forte because it was only manufactured at one South Korean plant, which met demand for the model worldwide.

"We couldn't bring more units to the United States!" Hedrick recalled.

But that situation will change radically in the coming months, when Kia's first assembly plant in Mexico starts operating in the northern industrial city of Monterrey in May or June.

That facility will assemble the new Forte 2017 models for the U.S. market, allowing Kia to increase its focus on a model and segment that is especially important for auto makers.

Although the compact sedan segment is very competitive and profit margins are relatively narrow, it serves as a point of entry into the auto market for many drivers, particularly young people - buyers who in the future will be looking for bigger and more expensive vehicles. Along those lines, Hedrick said Kia had been able to build customer loyalty in North America on the basis of the "quality, design and value" of its vehicles.

Source: Fox News Latino