Kia Breaks Ground for Slovakia Car Plant

Kia Motors Corp., Korea's No. 2 carmaker, has broken ground on its first European plant in Slovakia.

According to Kia officials, the company has begun construction on the plant near the northern town of Zilina. It obtained the go-ahead for the project from the Slovak government a day before the construction was started.


The Zilina plant is the centerpiece of Kia's drive to expand in Europe. The facility will enable the automaker to sell cars regionally at a tariff rate of 10 percent rather than the current 17.1 percent. Kia will spend more than 1.1 billion euros on the project.

Construction is scheduled for completion in 2006. The plant will have annual production capacity of 300,000 vehicles and create more than 2,800 jobs.

Slovakia beat Poland to win the Kia investment mainly due to lower labor costs and better transportation infrastructure. The Slovak government also offered tax incentives and free land to Kia.

The plant in Zilina will mainly roll out minicars and compact models, Kia's main products for the European market. The region is the second-largest overseas market for the carmaker after the U.S.