April 19, 2024

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[THE INVESTOR] Dongkook Industrial, a local auto parts maker, will start production at its new Mexico plant in the second half of next year to provide components to Kia Motors. 

The firm, which mainly supplies to Hyundai Motor and Kia, on Sept. 26 said it has completed setting up a new unit in Mexico to tap into the burgeoning auto market. It has recently decided on a 30 billion won (US$26.39 million) capital increase to finance the construction and operations of the new facility. 

Earlier in April, the auto parts affiliate of Kabul International Group, kicked off construction of the factory in Pesqueria, in the northern Mexican state of Nuevo Leon, the same city where Kia opened its manufacturing base last year. 

Dongkook projects the construction of the facility to be completed by November. Following the test-run of the factory, it plans to start production in the second half of next year, rolling out parts such as crash pad, garnish and fog and head lamps, that will be first delivered to Kia. 

“Mexico is our third overseas office after China and Europe,” a Dongkook official said in a statement. “Our goal is to reach 42 billion won in revenue by 2020 in Mexico.”

The firm is hoping to expand its client base in the region, where many global carmakers are aggressively expanding. 

Kia recently reported record sales in Latin America, despite its sales slump in other major markets such as US, Korea and China. Last year, it sold 196,938 units in Central and South America, up 22.7 percent on-year.

By Ahn Sung-mi (sahn@heraldcorp.com)