Kia to Build Auto Plant in Mexico

Kia Motors Corp. is preparing to build an auto plant in Monterrey, Mexico, that will be able to make 300,000 vehicles per year, unnamed sources tell Reuters.

Kia confirms only that it and affiliate Hyundai Motor Co. are considering options to ease their capacity constraints in the U.S.

Kia makes the Optima sedan, Sorento SUV and Hyundai's Santa Fe SUV in West Point, Ga. Hyundai builds the Elantra and Sonata sedans in Montgomery, Ala.

Both brands have complained since mid-2012 that their U.S. sales are being hurt by insufficient production capacity. Last year combined Hyundai-Kia sales in the U.S. were flat in a market that expanded 8%.

Reuters notes that a new Kia plant would signal an easing of an unofficial moratorium on expansion imposed two years ago by Hyundai-Kia Chairman Chung Mong-koo.