Kia Malaysia has signed a strategic agreement with Stellantis Malaysia for the Korean brand's upcoming completely knocked-down (CKD) vehicle assembly operations in Malaysia, marking a shift in its local manufacturing strategy.

Under a memorandum of understanding signed on 8th June, Stellantis Malaysia will serve as Kia's contract assembler at its manufacturing facility in Gurun, Kedah. Production of Kia models at the plant is scheduled to commence in the third quarter of 2026.

Kia Malaysia's CKD vehicles are currently assembled at Sime Darby Motors' Inokom plant in Kulim, Kedah. The existing arrangement, which has been in place for five years, will conclude as all local assembly operations are consolidated at Stellantis Malaysia's Gurun facility.

The first Kia model to roll off the Inokom production line was the Kia Carnival (KA4). The facility currently assembles the Kia Sportage (NQ5), the Kia Carnival (KA4), and the facelifted Kia Carnival (KA4 PE).

Sime Darby Motors owns a controlling 51% stake in Inokom, while Sime Darby Hyundai holds 5%, Hyundai Motor Company of South Korea owns 15%, and Bermaz Auto holds the remaining 29%.

The Gurun plant is equipped to accommodate the production of Kia's current models, including the Sportage and Carnival, as well as future models from the brand.

According to Kia Malaysia, the facility spans approximately 140 acres and includes a main assembly plant, a two-storey office building, paint and body shops, an on-site test track, and dedicated vendor and supplier zones. The plant currently employs more than 400 trained personnel.

The Gurun facility has a long association with the Kia brand. The site previously assembled Kia vehicles under Naza from 2004, when it operated as the Naza Automotive Manufacturing plant. The facility was subsequently sold to PSA Group in 2018 before Stellantis assumed full ownership in 2021.

Kia Malaysia previously operated in the country through local distributor Bermaz Auto but has since transitioned to a direct-to-market model under Kia Sales Malaysia. The move follows Bermaz's announcement in November last year that it would cease distributing Kia vehicles in Malaysia. Kia Malaysia will oversee the brand's local assembly operations at the Gurun facility.

"This collaboration is part of Kia's strategy in Malaysia. Through its partnership with Stellantis Malaysia and the use of Malaysia's automotive supply chain ecosystem, Kia intends to expand its local operations and support future model introductions in line with its plans for Malaysia and the region," said Kia Malaysia and Kia Sales Malaysia President and Chief Executive Officer Hyung Ho Kim.

Stellantis ASEAN Managing Director Isaac Yeo said the company will continue the development and utilisation of the Gurun facility while supporting partners, suppliers, and the broader automotive and manufacturing sector.

Stellantis' Gurun plant was recently in the news, with Chinese carmaker Leapmotor announcing that completely knocked-down (CKD) work for its C10 EV had already started at the said facility, and that the CKD B10 will be ready to be rolled out in two to three months' time.