South Korean car manufacturer Kia has proposed a plan to construct its second purpose-built vehicle (PBV) factory in the country, reported the Korea Economic Daily.

The plan was put forward by Hyundai Motor Group’s car manufacturing unit during wage negotiations with its unionised workers.

Kia seeks to build this new facility specifically for large-scale PBV production, codenamed LW. Production is expected to begin in 2028.

The development is expected to increase Kia's ability to better compete in the domestic market in future.

The car manufacturer, which made the EV6 and EV9 electric vehicle (EV) models, plans to establish the plant at its Hwaseong production site, 80km south-west of capital Seoul.

Industry sources told the Korea Economic Daily: “The company needs to secure production capacity first in order to dominate the market earlier than others.

“It may have decided on the bold investment, which exceeded market expectations, as it already secured customers in the logistics sectors such as Coupang and CJ Logistics.”

Earlier in April this year, Kia commenced construction on its first PBV factory at the complex with an investment of Won1tn.

The company intends to make approximately 150,000 units annually of a mid-sized vehicle, currently dubbed SW, at the plant, which is said to become the first dedicated facility for PBVs and South Korea’s first factory exclusively for EVs.

This facility is set to begin production in the second half of 2025.