UPDATE 1-South Korea's Kia Motors plans first plant in Mexico-sources
* Carmaker picks Monterrey, Mexico for new plant - source
* Needs 21 months to start production after groundbreaking - source
* New factory will build small vehicles - source
* Capacity set at 300,000 vehicles a year - source
* Carmaker mulling means to solve U.S. supply shortage - spokesman (Add comments from sources, background)
By Hyunjoo Jin
SEOUL, June 2 (Reuters) - Kia Motors Corp plans to break ground soon on a new plant in Mexico, two sources familiar with the matter said, a further sign that the company and its affiliate, Hyundai Motor Co, are easing an unofficial moratorium on capacity growth.
The plant, to be built in Monterrey, will have a capacity of 300,000 vehicles and initially produce two small cars, one of the sources told Reuters. The facility would help meet demand in the United States, where Kia's lone plant runs at full speed.
The sources declined to be identified because the plans are not yet public. Asked about a new factory in Mexico, a company spokesman told Reuters Kia is considering various options to resolve capacity constraints in the United States, but no decision had been made. Continuación...