Kia aims to double China car sales in ’08

Kia Motors Corp , said on Saturday it aims to double its sales in China next year with the help of its second factory in the world’s second-largest car market.

Kia opened its second Chinese factory, with an annual production capacity of 300,000 vehicles, in Jiangsu province. The company has another car plant nearby with a capacity of 130,000 units.

Kia said in a statement its Chinese unit aimed to sell 200,000 vehicles in the world’s fastest growing auto market next year.

For the first 11 months of 2007, it has sold 89,712 cars, down 13.8 percent from the same period a year ago. But Kia dealers in China on Friday resolved to sell 15,000 cars in December, the company said.

To meet the 2008 target, Kia plans to produce 100,000 units each at both the first and second factories next year.

Further ahead, the company aims to sell 440,000 units in China by 2010, when the latest factory will be operating at full capacity.

The $800 million second plant came as Hyundai and Kia, the world’s sixth-largest auto maker by combined sales volume, are facing cut-throat competition in China, prompting concerns about the need for additional capacity at a time of sluggish sales.

Hyundai, which also is set to begin mass production at its second Chinese plant from next year, cut its 2007 sales target for China by 16 percent in September. It posted a 20.4 percent drop in sales for the first 11 months of this year.

Hyundai has set ambitious sales goals for its new $1 billion plant, saying it aims to sell 500,000 units there in 2008, almost double this year’s revised target of 260,000.

Analysts say overseas units are key for growth at Hyundai and Kia as they may help them cope with the impact of strength in the Korean won and possible disputes with unionised workers in South Korea.

Hyundai and Kia plan to have around half their output — or more than 3 million vehicles — abroad within the next four years. Last year, they produced 1 million units abroad.

Hyundai has factories in the United States, China, India and Turkey, and is adding another one in the Czech Republic. Kia, which has plants in China and Slovakia, is building a factory in the United States. [Source: Reuters]