Korean Industry Briefs: Polish Audio Plant; Pride Prices; Kia's Russian Joint Venture

10/16/96

Daewoo to Build a Car Audio Plant in Poland

Reuters reports that Daewoo Electronics Co Ltd--a unit of South Korea's Daewoo Group--announced that it would build a $1 million car audio plant in Poland. A company statement said the plant would start operating in March 1997 and make 200,000 car audio systems in its first year. Daewoo said the plant's production capacity would increase to 500,000 in 1998 and to one million by 2000.

Kia Motors Lowers the Price on Its Pride Models

Comline has reported that Kia Motors will make its very low-priced Pride at a competitive price level with Hyundai's MX light passenger car, which is scheduled to be introduced during the second half of next year.

Kia says it will cut prices on its conventional Pride model by leaving off some convenience items like audio equipment and side molding. The new model also closes the price gap between the Pride and Daewoo's Tico light passenger car. Daewoo originally developed the low-priced Tico to supply it in China as a national car.

Kia, LG Form Joint Venture in Russia

Comline reports that Kia Motors and the LG Business Group have agreed to establish a joint venture in Russia with an investment of $500 million. Industry sources say Kia Motors and LG International agreed to join forces in principle on October 10. They are still negotiating details like equity ratio. The two companies have decide to produce and market cars jointly in Russia and CIS. Analysts predict that LG and Kia will expand their joint auto business in other regions.

Kia Motors has entrusted exclusive sales rights to LG International in Russia, and the two companies agreed on joint production and marketing. The alliance will allow Kia to secure an advantage in facility financing and marketing, while permitting LG to boost its revenues and enter the auto manufacturing sector.

Reportedly construction on a joint plant in Russia will be completed in 1998; when built, the plant will produce 50,000 units of the Sephia passenger car and Sportage four-wheel drives.

Paul Dever -- The Auto Channel