www.ajc.com/business/content/business/stories/2008/09/2 -
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Published on: 9/26/2008
Last Visited: 9/26/2008
Hirofumi Yokoi, a Tokyo-based analyst with auto industry consulting firm CSM Worldwide, agreed that Kia should be able to keep its schedule for the factory, which will employ 2,500 people and create several thousand jobs at local suppliers.
Both Kia and Hyundai are increasing manufacturing capacity worldwide to minimize shipping costs, tap local markets and limit the impact of exchange rate fluctuations.The West Point plant, Kia's first in North America, is a key part of that strategy, Yokoi said.
But longer-term market shifts — particularly changing consumer demands as gasoline becomes more expensive — have caused Kia executives to reconsider what vehicles will be built in West Point, he said.
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The plant in Montgomery "will play a crucial role to build passenger cars" while the West Point facility may focus on building sport utility vehicles and light trucks for both Kia and Hyundai, Yokoi said, citing information from a consultant who works with Hyundai.
While the current credit tightening will not disrupt construction in West Point, it might slow future investments by the South Korean companies, Hyundai director Kim said.
"The subprime mortgage loan issue has had large effects worldwide and South Korea is no exception," he said.
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