Kia Motors Corp., South Korea’s No. 2 automaker, signed an investment contract on Wednesday to build a new Chinese assembly plant in an effort to better meet demand growth in the world’s largest car market.

The deal calls for the Kia plant, which will be the third in the country, to be built by the second half of 2014 and have an annual production capacity of 300,000 cars.

This output will compliment the 430,000 cars that are currently being made by the carmaker’s two car assembly lines in Yancheng, Jiangsu Province.

The third plant will be built just 5 kilometers from one of the existing Kia plants, which is expected to boost efficiency since the two can share production-related infrastructure, the company said. The regional Chinese government offered 1.5 million square meters of land for free to reduce construction costs.

Kia, which makes cars in the country through Dongfeng Yueda Kia Automobile Co., said its market share reached 3.5 percent as of late September, marking the first time it has ranked as one of the top 10 carmakers in China.

Kia, one of the flagship companies of Hyundai Motor Group, the world’s fifth largest carmaker, said that if local output of its sister company Hyundai Motor Co. is tallied, the South Korean automotive group will be able to produce 1.73 million cars per year once the new plant is completed.

Kia also said that its sales in the United States this year have exceeded 400,000, reflecting the growing popularity of Korean vehicles here.

Kia sold a total of 405,095 cars in the first 10 months of this year, the first time for the company to record more than 400,000 in its yearly sales in the U.S. market, according to its local marketing office.

Kia’s sales in the U.S. stood at 367,405 in 2010.

Kia officials said the increased sales have been driven by its major RV model Sorento and Optima sedan.

South Korea’s No. 1 carmaker, Hyundai Motor, also continued its smooth run in the U.S. market despite uphill competition with Japanese and European rivals.

Hyundai Motor America said it sold 52,402 vehicles in the U.S. in October, a 23 percent increase from the same period a year ago.

It has sold 545,316 units so far this year, more than it did in all of 2010 and already a full-year sales record. The sales of the Elantra, Santa Fe and Tucson models posted huge growth, it said.

“Breaking our all-time any-time sales record . . . with two months left in the 2011 calendar year, is an accomplishment we take great pride in,” said Dave Zuchowski, Hyundai Motor America’s executive vice president of national sales, in the sales report.

“The overall sales environment appears to be stabilizing, despite continued fluctuations in traditional economic indicators.” 

(Yonhap News)