Kia Motors drafts Trump contingency plan

SEOUL: Kia Motors said on Thursday it is drawing up a contingency plan to cope with the policies of US President Donald Trump, reflecting growing wariness by Asian exporters about the prospect of US protectionism.

Trump has promised to revive US industrial jobs by forcing automakers to stop making cars in Mexico, threatening to tax imports and promising to make it more attractive for businesses to operate in the United States.

South Korea-based Kia Motors last year started production at a new plant in Nuevo Leon, Mexico, while sister firm Hyundai Motor will begin making cars at Kia’s Mexico plant this year.

“We acknowledge that there are a lot of concerns about the uncertainty stemming from the new US administration,” Han Chun-soo, Kia’s chief financial officer, said during an earnings conference call.

“While closely monitoring its policy directions, we are preparing to respond by setting up a step-by-step, scenario-based contingency plan.”

Trump has warned German carmakers and Japan’s Toyota of a “big border tax” if they build cars for the US market in Mexico. So far however he has not commented on the South Korean carmakers’ plans.

Kia plans to more than double its Mexico output this year to 250,000 vehicles and aims to boost US sales by 8 per cent to 699,000 vehicles. Hyundai and Kia together rank fifth in global car sales. — Reuters