Kia turned its struggling China plant into a profitable export hub for 90 countries. This is how they did it.

YANCHENG, China — Kia's third plant in Jiangsu Province is not the story of a Korean automaker retreating from China.

Rather, it is the story of a company that lost China's consumer market to homegrown electric vehicles, then quietly rebuilt its Chinese factory into something else entirely. The plant is now a crucial global export base that turned profitable in 2024 after seven years of losses, shipping roughly 80 percent of its output to 90 countries worldwide.

Inside the Jiangsu Yueda Kia complex — which produces models such as the Seltos, Sportage and EV5 and was visited by a group of Korean journalists on July 2 — the continuous clatter of pneumatic wrenches and the mechanical thrum of conveyor systems fill the air. Banks of yellow robotic arms press and weld behind safety cages in sequences no human hand could match. Alongside them, workers in gray uniforms handle the specific bolting work that, at Chinese labor costs, still makes economic sense to do by hand rather than by machine.

"Technically, we can automate the entire process," said Jeong Sang-min, a manager at the adjacent Hyundai Mobis plant, which supplies modules to the facility. "But we evaluate every investment against the return on investment. With regional labor dynamics, full automation isn't always the most efficient path forward."

The transformation that produced this factory-within-a-factory was not planned from the start.

Yueda Kia — originally established in 2002 as a joint venture between Dongfeng Motor, Jiangsu Yueda and Kia, before Dongfeng exited the partnership in 2022 — opened in Yancheng to serve what was then one of the world's most promising consumer markets. Its first model, the Qianli Ma, was named after a mythical horse capable of covering a thousand li (about 310 miles) in a single day, reflecting the company's outsized ambitions.

Production eventually peaked at 650,000 vehicles in 2016.

That era ended in stages. Sales began falling after the diplomatic fallout over Seoul's 2016 decision to allow the deployment of the U.S. Terminal High Altitude Area Defense (Thaad) air defense system, which triggered a Chinese consumer backlash against Korean brands. Covid compounded the damage, and by 2021, production had dropped to around 150,000 vehicles.

China's domestic EV makers, led by BYD and a sprawling field of well-funded competitors, took control of the price points where Korean brands had long held sway.

"Chinese consumers weigh the cost-performance ratio," Jeong said. "At that price bracket, they often look toward competing foreign legacy brands or domestic EV players."

As domestic sales slowed, the plant was left running far below its design capacity.

The pivot to exports began as a survival strategy, expanding from two export models to six. By 2024, total production rebounded to 240,000 units, climbing to 250,000 units in 2025.

This year, the joint venture targets 270,000 vehicles. With about 80 percent of this volume destined for overseas markets, the operation surpassed its break-even point of 230,000 units, returning to profitability for the first time since 2017.

What makes the complex genuinely difficult to abandon is the sheer depth of the infrastructure accumulated over more than two decades.

A massive overhead conveyor belt runs directly from the adjacent Jiangsu Hyundai Mobis plant into Kia’s assembly line. It feeds chassis modules, front-end modules (FEM) and engine assemblies in the exact sequence that Kia’s production schedule demands — operating on a strict Just-in-Sequence (JIS) system without a single logistics vehicle crossing between the two facilities. The two factories effectively function as a single organism; unwinding one would mean dismantling both.

The same logic extends across the broader supply chain.

Of the 238 component suppliers that work with the plant, 91 are Korean firms that entered China alongside Kia. While these accompanying suppliers once accounted for over 60 percent of the ecosystem, that proportion has shifted to around 35 to 40 percent as the plant increasingly integrates local Chinese component manufacturers to optimize costs.

"The Chinese relationship culture — guanxi — makes it genuinely hard to [sign deals with] new customers," Jeong said.

The human and environmental stakes are similarly embedded in the local economy.

The Yueda Kia operation is estimated by Yancheng authorities to support around 100,000 jobs across the regional economy, including 4,000 direct positions at the plant, as well as dealership networks and supplier workforces.

Furthermore, the facility has transformed into a green manufacturing model. Massive solar arrays covering 270,000 square meters (2,906,256 square feet) of the plant's shipping yards generated enough power to meet 39 percent of Plant 3’s electricity needs in 2025. Combined with Plant 2, the Yancheng complex accounts for 80 percent of Kia’s total global solar power generation.

This newfound profitability has also triggered fresh reinvestments into the work force.

In 2024, the company invested approximately 8 billion won ($5.8 million) to install comprehensive cooling and air conditioning systems across its production lines, improving working conditions during Yancheng's grueling summer months, when temperatures routinely exceed 40 degrees Celsius (104 degrees Fahrenheit).

Kia and Hyundai Mobis operate within the China-Korea Yancheng Industrial Park, a bilateral project that traces its origins to a 2014 summit between then-President Park Geun-hye and Chinese President Xi Jinping and received fresh momentum in January of this year, when South Korean President Lee Jae Myung's state visit to Beijing produced a new cooperation MOU between the two countries' trade ministries.

As of this year, 125 anchor companies operate within the park, including SK New Energy, Hyundai Mobis and Jinxin Electronics, of which 89 meet the threshold of above-scale enterprises by Chinese industrial standards.

Total Jiangsu-Korea trade reached $86.3 billion in 2025, according to Korea's Ministry of Foreign Affairs, with Korea ranking as Jiangsu province's single largest import partner. Korean investment in Jiangsu stood at $1 billion that year.

Driving in from elsewhere in Jiangsu — where street signage is Chinese characters only — the transition is visible almost immediately: road signs appear in Korean alongside Chinese, and the surrounding locations bear names such as the China-Korea Cultural Exchange Center, Korea-China International Street, and the Han-Zhong Hotel. A city official on a one-year secondment from Ulsan said she had found it less isolating than she expected.

The park's promotional materials pitch itself to Korean companies with a line that captures something of the moment's ambivalence: "Your real home ground is right here."

Whether an export-led model can sustain a factory built for a domestic market it no longer serves is a question Yancheng cannot yet answer.

The markets currently absorbing Kia vehicles from China — across Southeast Asia, the Middle East and Latin America — face the same competitive advance from Chinese EV brands that reshaped the domestic picture in the first place.

For now, however, the trend points in the right direction: profitable, growing and busier than it looks from the outside.

BY SEO JI-EUN   [[email protected]]