US Automaker Buying Into Kia Industrial Co.
DETROIT (AP) _ Ford Motor Co. today confirmed that it intends to buy 10 percent of Kia Industrial Co., a South Korean manufacturer that will produce minicars for U.S. Ford dealers.
Ford spokesman Ken Brown said the proposal was subject to approval by the Seoul government and Kia stockholders, who were called to a special meeting next Wednesday in South Korea.
Kia stockholders also will be asked to approve a new stock issue worth about $23 million. Brown said Ford would own 10 percent of the expanded share amount.
Ford’s interest in Kia is through Mazda Motor Corp. Ford owns 25 percent of Mazda, the fourth-largest Japanese carmaker.
Mazda owns 8 percent of Kia, designs Kia’s cars and provides the company with technical assistance. Among other leading Kia stockholders are Seoul Bank & Trust Co., 15 percent, and C. Itoh & Co. of Japan, 2 percent, Brown said.
The Ford minicar is to debut in 1987 as a 1988 model. Ford officials, in announcing the import plans more than a year ago, have declined to give an introduction date.
The car is similar to a Mazda model sold in Japan under the name Festiva. Officials haven’t said whether the Festiva name will be used here.
A minicar is smaller than a subcompact, a U.S. segment currently occupied only by the Yugoslavian-made Yugo and the Japanese-made Chevrolet Sprint. The South Korean Ford is to have a 90-inch wheelbase.
Ford also plans to export Mazda-designed small cars to the United States from its own assembly plant in Mexico and to Canada from its Taiwan factories.
General Motors Corp. owns 50 percent of Daewoo Motor Co. Ltd. of South Korea and plans next year to import for U.S. Pontiac dealers a subcompact Daewoo car to be called the Le Mans.