Automotive News - March 3, 2008 - 49

MARCH 3, 2008 • 49 Kia will build transmissions at Georgia plant April Wortham awortham@crain.com Kia Motors Corp. will build transmissions at its vehicle assembly plant being built in Georgia. The factory also will supply transmissions to Hyundai Motor Co. in Alabama. In return, Hyundai will supply engines from its Montgomery, Ala., vehicle assembly complex to Kia’s plant when the Kia plant opens in late 2009. The two assembly plants are about 80 miles apart. Hyundai has one engine plant building V-6s and is building a second to make four-cylinder engines. This will be the first Hyundai or Kia transmission plant in North America. The two automakers’ component swapping emulates the relationship between Kia’s auto assembly plant in Slovakia and one that Hyundai is building in the nearby Czech Republic, Hyundai spokesman Oles Gadacz told Automotive News in an e-mail. In Europe, Kia will produce as many as 600,000 engines a year for both plants once the Hyundai factory comes on line next year. Hyundai will make a similar number of transmissions. “One plant produces the engines while the other (produces) transmissions, which they will share with each other, thus maximizing efficiencies of scale and avoiding duplicate investment,” Gadacz said. Hyundai owns 39.9 percent of Kia. Said Hyundai spokesman Gadacz: “As a matter of official policy, we do not discuss our plans for products that will not be coming out within the next 12 months.” Hyundai-Kia drivetrains Hyundai and its affiliate, Kia, will share drivetrain components in America. Hyundai builds Sonata sedans and Santa Fe crossovers in the United States, and Kia will build Sorento SUVs, using the following engines and transmissions. COMPANY FACTORY WILL SUPPLY May add engine The Sorento is the only vehicle Kia has said it will build in Georgia. Alex Fedorak, a Kia spokesman, said he did not know when a second model would be announced. “I suspect a decision has been made somewhere, but I doubt we’ll learn more until we get closer to Job 1 in 2009 for the plant,” Fedorak said. Robert Burns, spokesman for Hyundai’s Alabama plant, said the Kia plant may not need four-cylinder engines at startup, but “they may add another vehicle later on that could use engines produced in Montgomery.” Hyundai’s existing six-cylinder engine factory in Montgomery is capable of producing 200,000 engines a Hyundai Hyundai Kia Montgomery, Ala., engine plant No. 1 Montgomery, Ala., engine plant No. 2 West Point, Ga. 3.3-liter V-6s 2.4-liter 4-cylinders Transmissions Source: Hyundai Motor Co. year, but that plant has been underused as demand for six-cylinder Sonatas has waned. The Santa Fe also assembled in Montgomery comes exclusively with a V-6, while the Sonata is available with a four-cylinder. c ™ Powertrain puzzle The revelation explains where Kia will get powertrains for the 300,000 vehicles it plans to build annually in West Point, Ga. When Kia broke ground on the $1 billion Georgia factory in October 2006, Kia CEO Chung Eui Sun said the company would use engines built at Hyundai’s Alabama plant. At that time, Hyundai had an engine factory in Montgomery that had been producing 3.3-liter six-cylinder engines since 2005. The V-6s are used in Santa Fe crossovers and some Sonata sedans assembled in Alabama. But in January 2007, Ian Beavis, then-Kia Motors America marketing vice president, told Automotive News that Kia would one day build its own engines in Georgia. He pointed to an unidentified building in an artist’s rendering of the future Kia plant. Labeled only as “module,” the building is roughly one-third the size of the final-assembly building. Beavis and CEO Len Hunt left Kia Motors America Inc. last month. Adding to the confusion, Hyundai said last April that it would build a second engine factory in Montgomery to produce 2.4-liter fourcylinder engines that would be shared with Kia’s Georgia factory. The four-cylinder engine factory is to open in late summer with an initial production capacity of 200,000 engines annually. But so far, Kia has announced only one vehicle for its Georgia factory: the Sorento SUV. The Sorento now is available with two engine variants: a 3.3-liter V-6 and a 3.8-liter V-6. Sorento sales volumes indicate that Kia will need to add at least a second nameplate to the Georgia factory’s lineup.

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Automotive News - March 3, 2008

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