Kia to break ground on U.S. plant after six-month delay

Kia Motors Corp., South Korea's second-largest automaker, will begin construction of its first U.S. plant on Friday after a six-month delay over a bribery scandal involving its top executives, company officials said Thursday.

Kia originally planned to start construction of the plant in West Point, Georgia in April, but the ribbon-cutting was delayed as Chung Mong-koo, the chairman of its parent Hyundai Motor Co., was arrested on charges of bribing government officials with slush funds. Chung was released on bail in July and is now on trial.

By late 2009, Kia will spend US$1 billion to build the Georgia plant, which will have an annual production capacity of 300,000 cars.

"I will help Georgia become a new Mecca of the North American automobile industry by building the Kia plant with top competitiveness," Chung said in a dinner meeting with Georgia state officials.

Chung's eldest son, Eui-sun, Kia's chief executive officer, also attended the meeting.

The Kia plant in Georgia is located about 134 kilometers northeast of Hyundai Motor's Alabama plant. In May 2005, Hyundai Motor began production at the U.S. plant.

The groundbreaking comes as Hyundai and Kia are stepping up their efforts to upgrade their brand awareness in the world's largest auto market.

While the Korean automakers have significantly raised their quality profile and sales in the past, many U.S. drivers still regard Hyundai and Kia as a cheap brand, analysts say.

In 2010, Hyundai and Kia aim to grab 8.6 percent of U.S. market share by selling a total of 1.65 million vehicles. Last year, the two Korean automakers sold about 820,000 cars in the U.S.

Atlanta, Oct. 19 (Yonhap News)