Kia to build first Korean facility after 26 years

Kia will hold its groundbreaking ceremony in Hwaseong, where its first facility in South Korea is set to be built in March. It will be a factory for the production of Purpose Built Vehicles (PBV) and is expected to yield 200,000 units per year starting July 2025.

The plant will be Kia’s very first facility in South Korea in 26 years, and this means the automaker has not constructed any factory in the country in more than two decades. It was reported that the company made the decision to build a new vehicle factory plant in its home ground following years of negotiations with its own labor union.

According to The Korea Herald, Kia and its unionized workers reached an agreement with regard to the production of 200,000 electric PBVs, annually. It is said to be a long-term contract that will also eventually expand the production lines from 50,000 units.

The PBVs to be built include electric buses and shuttle service vehicles, and future mobility vehicles such as robot taxis and portable offices. Purpose Build Vehicles are eco-friendly mobility device based on an electric vehicle that supports various future lifestyles.

In any case, Kia and the labor union also agreed to make pickup trucks with internal combustion engines. It will be produced in one of the three plants in Hwaseong by Dec. 2024. It was added that Kia would be making its first pickup truck model in 43 years, as this was discontinued in 1981.

“Although pickup trucks have been considered to appeal to a small customer base, demand for the light-duty vehicles is growing quickly in global markets and likely to increase here as well,” a company official said.

Kim Pil Su, an automotive engineering professor at Daelim University, also commented, “Although PBVs are expected to account for 30% of the total vehicles by 2030 worldwide, it would have been reasonable to lower the target production volume from 200,000 to 150,000 units. Even Tesla is currently facing oversupply issues with its gigafactory in Shanghai due to a demand shortage.”

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