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Dongfeng Yueda Kia, a joint venture with South Korea's Kia Motor Company in China, is considering shutting down its first factory, Reuters reported recently. Dongfeng Yueda Kia officially responded to the report: it is structural rationalization and there will be no layoffs.

Sources have revealed that South Korea's Kia may suspend operations at its first plant in China as part of the company's competitiveness and long-term efforts, Reuters reported on March 11. Subsequently, Kia issued a statement saying that the company is currently reviewing a number of plans to enhance its production and sales competitiveness in the Chinese market.

In this regard, Dongfeng Yueda Kia issued a "explanation on the rationalization and adjustment of the structure of our first factory." The note pointed out that after the consultation of the three shareholders, the suspension of the first plant is mainly used to transform and upgrade to a new energy vehicle plant, complying with the requirements of domestic double points regulations. And it is clear that after the rationalization of the structure, Dongfeng Yueda Kia will not lay off staff.

Dongfeng Yueda Kia was established in 2002 by Dongfeng Group, Jiangsu Yueda Investment Co., Ltd., and Kia Automotive Co., Ltd., Korea. The factory is located in Jiangsu. Yancheng, at present, three factories have been put into operation, with an annual output of 900000 units. Among them, the first factory has an annual production capacity of 150000 vehicles, producing smart running and KX7 models; the second factory was put into production in December 2007, with a total design capacity of 300000 vehicles; and the third plant was put into production in early 2014, with a design capacity of 450000 units.

Dongfeng Yueda Kia sold only 370000 vehicles in 2018, roughly the same as in 2017, while Kia reached an annual sales peak of 650000 in 2016.

Official statement:

Explanation on the rational adjustment of the structure of the first factory of our company

In order to comply with the development trend of the country's "New four modernizations of Automobile", actively support Yancheng in developing new energy automobile industry, self-driving and other emerging technologies, and build an intelligent city, after the preliminary consultation of the shareholders of Dongfeng Yueda Kia, it is proposed to rationalize the structure of a factory, as explained as follows:

First, in order to follow the national government's double points laws and regulations and stabilize the future career foundation, Dongfeng Yueda Kia plant plans to be specially used to produce new energy vehicles, to create a new energy factory with "zero pollution" in the environment by means of intelligent manufacturing, and to create a new business card for an environmentally friendly city.

Second, after the rationalization and adjustment of the structure, Dongfeng Yueda Kia will not lay off staff

Third, the above plan is under internal discussion. In view of the current informal content on the network, the above explanation is specially made and will be announced to the public after the plan has been formally determined.

I would like to thank friends from all walks of life and the media for their attention and support to Dongfeng Yueda Kia. In the future, Dongfeng Yueda Kia will continue to adhere to quality orientation and develop along the road of high-quality, intelligent and clean energy. we will always provide users with quality products and services. and make unremitting efforts to build car brands loved by Chinese consumers.

Dongfeng Yueda Kia Automobile Co., Ltd.

March 12, 2019

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