Kia mulls building its first ASEAN production facility in Thailand

Kia Corp.’s EV6. [Courtesy of Kia]

South Korean automaker Kia Corp. is reviewing the plan to build a production facility in Thailand with an annual capacity of 250,000 cars, according to sources on Wednesday.

The move is seen as part of an effort to advance aggressively into the Association of Southeast Asian Nations (ASEAN), following India, while its Chinese business remains sluggish. It is also seen as a strategy by its parent Hyundai Motor Group to diversify its global production base.

According to multiple sources from the automobile industry on Wednesday, Kia is discussing details on building a factory in Thailand. It is the first venture into building a new overseas plant in four years after the construction of the Indian factory in 2019.

Kia and the Thai government are expected to sign an investment deal on the factory construction later this year. Construction is expected to begin in the first half of next year for the plant with an annual production capacity of up to 250,000 units.

Kia currently operates overseas production facilities in the U.S., China, India, Slovakia, and Mexico. The Thailand factory will be its sixth global production base.

As for Hyundai Motor Group, it will be the second production base in ASEAN.

Kia’s bigger sibling Hyundai Motor Co. began operations of a production facility in Indonesia last year. Hyundai Motor Group’s entry into Indonesia and Thailand comes as the two countries are the largest automobile markets with potential for growth.

According to the ASEAN Automotive Federation, Indonesia had the largest sales in the first half of this year with 505,985 units, followed by Thailand with 406,131 units, and Malaysia with 366,037 units.

Thailand has emerged as a market that will offer new business opportunities to Kia, as its government pledges to expand the production of electric vehicles (EVs) by 2030 with supportive initiatives.

Kia will promote its flagship EVs, such as EV6, in Thailand.