Kia’s Gwangju auto plant gears up for 2nd heyday with EVs

GWANGJU, South Jeolla Province -- Kia Corp.'s plant in Gwangju, about 270 kilometers south of Seoul, bustled with workers and cars, including its best-seller Sorento, last week when it hosted a tour for media, making it hard to believe that the factory was on the verge of collapse about 25 years ago.

Now that seems a distant memory as Kia’s second-largest auto manufacturing center at home, South Korea, is readying to take another big leap with the production of electric vehicles, especially a new EV model specifically developed for Chinese drivers.  

Opened in 1965 as Asia Motors Industries, Kia’s auto plant in Gwangju, dubbed Kia AutoLand Gwangju, is composed of three factories with a floor area of about 1,190,082 square meters.

Combined with its commercial vehicle factory for buses and trucks in Hanam, Gyeonggi Province, Kia AutoLand Gwangju is capable of producing about 500,000 units of eight Kia models annually. It employs 7,800 workers in total.

The current production capacity is a whopping 800% surge from 1998 when it
produced about 60,000 units a year due to the financial struggle faced by the Korean automaker in the aftermath of the 1997-98 Asian financial crisis.

But a rescue came as Hyundai Motor Co. took over Kia Motors, the parent of Asia Motors, in 1999 and restructured the latter’s auto manufacturing facilities in Gwangju in 2002 to improve the plant’s production efficiency and profitability.

Such efforts have paid off thanks to the launch of the Sportage's second generation in 2004, which was a huge hit and became the first model exported from Kia’s Gwangju plant to North America.

KIA’S EXPORT BASE GEARS UP FOR SECOND HEYDAY

Twenty years have passed since it joined Hyundai Motor, and the factory is now Kia’s main export base.  

The plant has cumulatively produced 2,947,700 units of the Sportage until June this year. The factory’s annual production capacity hit a record high of 538,896 units in 2014.

In the first six months of this year, Kia churned out 279,790 units -- 98,928 units for the domestic market and 180,862 units for overseas markets. The total figure is a 27.3% jump from the same period last year.

The growth was mainly led by Kia’s two most popular models Sportage and Seltos, the production of which soared 42.7% and 34.8% on-year, respectively, to 103,038 units and 84,504 units in the cited period.

Thanks to them, Kia’s global car shipments reached 1,575,920 units in the first half of this year, its record high for a first half-year period even without new model launches.

Especially, the smaller sibling of Hyundai Motor delivered 390,433 cars in the US in the cited period, adding 18% from a year ago and marking its historic high for first-half-year shipments in the world’s second-biggest auto market.

Kia is expected to maintain its current momentum.

Inside the first factory of the Kia AutoLand Gwangju, about 1,000 workers were busy manufacturing and inspecting Seltos, Soul Booster and Soul Booster EVs on Saturday.

The three models are produced on the same line despite their different power trains thanks to the factory’s mixed production line.

Reflecting strong demand for Kia cars, the utilization rate for each model on the line is near 100%.

The Kia AutoLand Gwangju is expected to be busier going forward as it plans to mass-produce a new EV model with the project code name OV1, a China-targeted EV.

It is said to be preparing to add the OV1 mass production line from January of next year.

Write to Sungsu Bae at baebae@hankyung.com

Sookyung Seo edited this article.