Nuevo Leon, Mexico – Kia and the Mexican state of Nuevo Leon have renegotiated state incentives for the massive assembly plant under construction in Pesquería, slashing the amount of local support by more than half.
Gov. Jaime Rodriguez Calderon, elected last year, had opposed economic development incentives offered to Kia, saying they were far too generous. Following the renegotiation, Secretary of Economic Development Fernando Turner says the state eliminated some reimbursements of federal taxes, limited subsidy payroll taxes and withdrew commitments to build a technical school and fire station.
Also as part of the new agreement, services such as electricity and water, among others, are to be provided by third parties and non-state authorities to reduce the tax burden.
President of Kia de Mexico, Bea Kim Seong says, “We had many difficulties, but with the support of the government of Nuevo Leon, along with the team of Kia, today we reached an agreement, something we can celebrate…If we work together, I know we will achieve more and better success in the future.”
Officials in Nuevo Leon say the original deal would have represented state support for about 28% of the $2 billion Kia project. The renegotiated terms will represent closer to 10% of the investment. The plant is set to begin production this year.
“This new agreement allows to generate substantial savings for the government of Nuevo Leon, but mainly aims to support KIA Motors’ operations by giving legal certainty that helps push it to a new stage of growth,” says Turner.
Source: Government of Nuevo Leon