[Kia Motors Concall] "Limited Impact from USMCA... Will Resolve 'LVC Shortfall' at Mexico Plant"

[Asia Economy Reporter Kim Ji-hee] Kia Motors stated on the 23rd during the 2020 Q2 earnings conference call, "The newly enacted United States-Mexico-Canada Agreement (USMCA) earlier this month allows for a 5-year grace period if a letter of implementation is submitted and approved," adding, "We expect to fully comply over the next five years and anticipate related costs to be limited."

Kia views the introduction of a new Labor Value Content (LVC) ratio at its Mexico plant as a potential issue. According to the new agreement, 40% of automotive parts must be produced by workers earning at least $16 per hour (excluding additional benefits) to qualify for tariff exemptions. Regarding this, Kia said, "The relevant ratio at the Mexico plant does not reach 40%, but we plan to resolve this in the long term through engine exchanges with the U.S. plant."

This content was produced with the assistance of AI translation services.