Kia halts Mexican auto plant on outages

Kia Motors is shutting its plant in Nuevo Leon, Mexico, for at least two days because of natural gas and electric power shortages, the company said.

The plant is carrying out a "technical shutdown" that will halt all shifts today and tomorrow, Kia told Argus about its Pesqueria plant.

"The decision we made today took into account the current cost of electric power and the recommendation by authorities not to saturate energy consumption," Kia said.

The plant will make up for the lost production next week, Aleman said.

The Kia plant does have some natural gas supply and electric power, but the company wanted to be "cautious" after gas imports from Texas were reduced, he said.

The plant's power is supplied by external providers such as state-owned utility CFE. The company is not considering trying to find other sources of fuels during the gas shortage, Aleman said.

Shortages in gas supply following record cold weather in Texas sparked power outages across northern Mexico starting on 15 February, affecting 4.7mn customers.

While residential power has returned, natural gas shortages for industry could intensify after Texas governor Greg Abbott ordered that all sourced natural gas "be made available for sale to local power generation opportunities before leaving the state of Texas."

The Pesqueria plant normally produces about 900 units per day, including Kia's Forte and Rio models and the Hyundai accent. The facility, which is Kia's only major plant in Mexico, exports around 70pc of its production, and around 80pc of its exports go to the US.

Manufacturing in industry-heavy Nuevo Leon has suffered 13.9bn pesos ($688mn) in production losses this week because of the outages, the state's industrial chamber Caintra said today.

Texas-based supermarket chain HEB also is cutting production at bakeries in its Mexico stores to reduce gas consumption.

By Jens Erik Gould