Kia Motors will start producing small cars, including its compact sedan brand K3 ― also known as Forte in overseas markets ― in Mexico from the first half of next year, Hyundai Motor Group said in a press release.

The plan was officially announced when the Korean automotive group chairman Chung Mong-koo paid an on-site visit to the construction site for Kia’s first plant in Latin America on Thursday.

The sister firm of Hyundai Motor broke ground last October to build the assembly line in Mexico with an annual production capacity of 300,000 units. 

The plant is the second production line in Latin America for the group, following Hyundai Motor’s plant in Brazil.

“I believe investments in Mexico were one of the most strategically important decisions to secure a new growth engine and survive in tougher global competition,’’ the chairman said.

In the long term, Kia’s plant in Mexico will become a production hub to help the group penetrate into not only the Central American region but also the U.S. market, the automotive group said.

Initially, Kia will focus on growing demand in Mexico, the second largest car market in Latin America after Brazil, by supplying small cars.

By Seo Jee-yeon (jyseo@heraldcorp.com)