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Kia may start producing third model at Slovak factory by 2010

Kia Motors Corp., South Korea's second-largest carmaker, may produce a third model at its Slovak plant to benefit from lower costs in the eastern European country and its proximity to key markets.

The plant, located in Zilina, northern Slovakia, began production in December, assembling Kia's Cee'd hatchback, aimed solely at the European market. Production of the Sportage sport-utility vehicle will start by June, and the factory may add another model by the end of the decade, said Soon-Pil Kwoun, a vice president of the Slovak unit, in a speech at the AutoSlovakia conference in the capital Bratislava today. „We are considering a new model, a model for the European market, but it hasn't been fixed yet,” Kwoun said. „It depends on the market situation.” Kia and its parent, Hyundai Motor Co., are building plants overseas as the group aims to become the world's fifth-largest carmaker by the end of 2010. The companies chose Slovakia and the Czech Republic as their base for a push into Europe as wages in the two countries are lower than those in western Europe. A Hyundai factory is scheduled to open in the Czech Republic in less than two years,

Seoul-based Kia has registered about 36,000 orders for the Cee'd model, of which 5,015 were produced last year, Kwoun said. This year, it plans to turn out 150,000 vehicles, with the Cee'd accounting for about two-thirds. The €1 billion ($1.3 billion) Slovak factory has a capacity of 300,000 cars per year, which should be reached in 2009. In 2008, the plant will produce 225,000 vehicles, Kwoun said. (Bloomberg)