Kia Motors, an affiliate of Hyundai Motor Group, said its new Mexico plant started operation Monday.

Located in Pesqueria in the northern Mexican state of Nuevo Leon, the plant will churn out about 100,000 K3 compact sedans -- known as Forte there -- this year. The carmaker said it plans to increase the plant’s annual production capacity to 300,000 vehicles in the future. 

“The plant in Mexico is not only pivotal to sales here, but also crucial for North and South American markets,” said a company official.

“About 80 percent of the production at the plant will be exported to 80 countries worldwide,” the official added.

The company also expressed hopes that it would gain tax benefits by producing cars there due to the North American Free Trade Agreement.

With its latest fourth overseas plant, Kia’s global production capacity is expected to reach 3.5 million units a year.

In Mexico, the carmaker sold 13,670 units in the first four months of this year, holding a 2.9 percent market share.

By Hong Sung-pyo (hong1@heraldcorp.com)