UPDATE 4-South Korea's Kia to build new vehicle assembly plant in Mexico
(Add comments from Kia, suppliers)
By Dave Graham and Luis Rojas
MEXICO CITY Aug 27 (Reuters) - South Korean automaker Kia Motors Corp has earmarked $1 billion to build a vehicle assembly plant in Mexico, and President Enrique Pena Nieto said on Wednesday he expects the plant will spur investments by suppliers of another $1.5 billion.
The plant, with a capacity to build 300,000 vehicles a year, will be located in the state of Nuevo Leon and should open in the first half of 2016, Kia said.
"This investment will trigger others, those of their suppliers. We estimate that suppliers will invest another $1.5 billion," Pena Nieto told an event in Mexico City.
A slew of Korean suppliers are expected to invest in a supply network for the plant. Hyundai Mobis plans a module factory in Mexico, while Mando Corp, which makes parts for steering, braking and suspension systems, is considering a plant there, spokesmen at those companies said.
Economy Minister Ildefonso Guajardo said the Kia facility would boost Mexico's auto output by 13 percent.
The Kia plant marks the latest in a series of major investments by global automakers as they seek to take advantage of Mexico's growing industrial base, low labor costs and tariff-free access to the U.S. market.
Last month, German luxury car maker BMW announced a $1 billion Mexican plant investment. So far this year, Mexico has attracted around $10 billion in auto sector investments. Continuación...