KIA and Hyundai ponder building $1 bln plant in Poland

South Korean automotive company KIA is interested in establishing production facilities in Poland, either through a takeover of existing plants or building a new factory. The company realizes that it cannot gain a strong foothold in the Polish car market if it does not produce cars here. This is due to the customs duty on cars imported from South Korea being set at 35%, while the customs on European Union (EU) imported cars will drop to 5% next year. The cost of building a new production facility is estimated at $1 billion which KIA would bear together with its parent company Hyundai. Other options include taking over Jelcz truck manufacturer owned by the Zasada group or a takeover of Daewoo plants in Poland. The latter solution seems unlikely, however, as Ford has been selected to negotiate the purchase of Daewoo Motor. KIA Motors Polska vice-president Andrzej Pulwarski says the cost of taking over an existing production facility amounts to just 30% of that of constructing a new one. Nevertheless, KIA and Hyundai are already looking at the Mielec Special Economic Zone (SSE) as a possible location for a new plant. (Puls Biznesu, page 3) T.J.