Kia Malaysia and Stellantis set up local vehicle assembly in Kedah by 2026

Kia Malaysia has signed a memorandum of understanding with Stellantis Malaysia to assemble Kia vehicles at the Gurun facility in Kedah. Production is scheduled to start in the third quarter of 2026. This agreement marks a significant step for Kia Malaysia to expand its completely knocked down (CKD) assembly operations in the country.

Key Highlights

• Kia Malaysia and Stellantis Malaysia to start local assembly in Kedah by third quarter of 2026
• Gurun facility will handle CKD production with a targeted annual capacity of 19000 vehicles
• Collaboration aims to strengthen Kia’s local presence and support future export opportunities

Details of the Manufacturing Agreement

Under the agreement, Stellantis Malaysia will serve as the contract assembler for Kia Malaysia. CKD production will take place at the Stellantis manufacturing facility in Gurun, Kedah. The partnership aims to increase Kia Malaysia’s local manufacturing capacity and strengthen its position in the Malaysian automotive market. The collaboration also supports future export opportunities in the region.

Both companies stated that the partnership will use Stellantis Malaysia’s manufacturing infrastructure and operational capabilities. This will help support Kia’s growth plans in Malaysia and beyond. Hyung Ho Kim, president and chief executive officer of Kia Malaysia and Kia Sales Malaysia, said the collaboration is a key milestone in Kia’s strategy to rebuild and reposition itself in Malaysia. He noted that leveraging Malaysia’s automotive supply chain ecosystem will help strengthen Kia’s local presence and manufacturing quality.

Gurun Facility Capabilities

The Gurun facility has been operational since 2021 and covers about 140 acres. It includes an assembly plant, a paint and body shop, an on-site test track, office facilities, and dedicated supplier zones. The plant employs more than 400 personnel and supports multi-model vehicle assembly across different powertrains.

The facility is equipped to produce current Kia models such as the Sportage and Carnival, as well as future models that may be introduced. The plant operates in compliance with ISO 9001 Quality Management System standards.

Kia Malaysia stated that the collaboration will improve manufacturing flexibility and scalability. It will also enhance readiness for future model launches. The partnership targets an annual production capacity of 19,000 vehicles over a five-year period starting from the commencement of operations.

Impact on Local Automotive Industry

For Stellantis Malaysia, the agreement adds another contract manufacturing program to its Gurun facility. This is expected to further utilize the plant’s production capabilities and support Malaysia’s automotive manufacturing ecosystem. The collaboration aligns with Kia Malaysia’s strategy to increase local manufacturing and prepare for future market demands.

Also Read: Kia India rolls out nationwide sustainability campaign across 500 workshops

CarBike 360 Says

The upcoming assembly operations in Kedah underline a strategic push by Kia Malaysia and Stellantis to strengthen their footprint in Southeast Asia. By localizing production, both brands aim to enhance efficiency, reduce costs, and better serve regional demand while contributing to economic growth and job creation in Malaysia’s rapidly evolving automotive landscape.