Kia to launch new models to take on Malaysian carmakers

Kia to launch new models to take on Malaysian carmakers

Agence France-Presse, Kuala Lumpur

South Korea's Kia Motors and its Malaysian partner Naza Kia
will launch four new car models next year mainly to take on
national carmakers Proton and Perodua, a report said on Friday.

The four models included a one-liter car, similar to Kia's
Picanto, and three higher-capacity models, the Financial Daily
quoted sources as saying.

The source said the one-liter car may be marketed initially as
a completely built-up unit before being assembled locally as a
completely knocked down unit, so it could be priced lower than
the 36,000-41,000 ringgit (US$9,474-$10,789) tag for the Kelisa
model by second national carmaker Perodua.

The cars will be assembled at Naza's new 300 million ringgit
plant in Gurun in northern Kedah state, which is expected to be
completed next year, the source said.

Naza Kia's group managing director Nasimuddin SM Amin was
quoted as saying the first of four new Kia car models to be
launched would hit the market in the first quarter. He did not
elaborate and company officials declined to comment when
contacted.

Kia has said it aimed to produce 17 new vehicles before 2007,
creating local assembly opportunities for Naza Kia, including
small cars, mid-sized sedans, sports utility vehicles and multi-
purpose vehicles, the report said.

Kia, which has no strong manufacturing presence in Southeast
Asia, may use Malaysian partner Naza group's manufacturing plant
in Gurun as its manufacturing base for the regional market, the
source told the daily.

The Gurun plant will have a production capacity of 4,000 units
in 2004, 25,000 units in 2005 and 45,000 units in 2008, the
report said.

Currently, Naza Kia assembles Kia Spectra and national multi-
purpose vehicle Naza Ria, a version of the Kia Carnival. Naza Ria
was given the national status in July last year and launched in
August 2003.

Naza has introduced eight Kia models on the local market since
it began marketing the Kia Sportage in 1996. The group began
operations in 1976 as an importer and trader of used and
reconditioned cars but is now a full-fledged auto assembler.

It also has interests in the hospitality industry locally and
abroad, and in public transport.

The move by Kia Motors Corp. will add pressure to Proton and
Perodua, as sales of national cars suffered amid intense
competition from Japanese and South Korean rivals ahead of market
liberalization under the Association of Southeast Asian Nations
(ASEAN) Free Trade Area (AFTA).

Under AFTA, tariffs on most products in the region fell below
five percent in January but Malaysia has obtained a reprieve for
its auto industry until 2005.

The government is expected to unveil by end of the year new
excise duties on imported cars to replace the loss of revenue
when import levies on these vehicles are reduced from January 1,
2004.