On the evening of March 1, Yueda investment released the announcement of the resolution of the fifth meeting of the 11th board of directors. The announcement showed that Dongfeng Yueda Kia Automobile Co., Ltd., with 25% of the company’s shares, planned to implement a capital increase of US $600 million. Due to the investment capital demand of the company’s new projects, it is planned to give up participating in the capital increase of Dongfeng Yueda Kia Automobile Co., Ltd., and the abandoned part is funded by Jiangsu Yueda Automobile Group Co., Ltd. As Yueda automobile group is an affiliated legal person of the company, the company gives up participating in the capital increase of Dongfeng Yueda Kia, which constitutes a connected transaction.

Considering the fierce competition in the domestic automobile industry and the company’s demand for investment funds for new projects, the company gave up participating in the capital increase of Dongfeng Yueda Kia. Before this capital increase, the equity structure of Dongfeng Yueda Kia is that Kia Co., Ltd., Yueda automobile group and Yueda investment hold 50%, 25% and 25% respectively. After the capital increase of Dongfeng Yueda Kia of US $600 million, the share ratio of the new company is 50%, 45.8% and 4.2% respectively held by Kia Co., Ltd., Yueda automobile group and Yueda investment.

Yueda investment said in the announcement: “the automobile manufacturing business will no longer be an important part of the company’s business structure. In the future, the company will actively look for new investment projects to improve the company’s profitability.”

Even if Dongfeng Yueda Kia is frustrated in the Chinese market, Kia is still optimistic about the Chinese market, especially in the field of new energy vehicles.

In February this year, South Korea Kia Co., Ltd. signed an investment expansion agreement with Yancheng Municipal People’s government and Jiangsu Yueda group. Kia and Yueda will set up a new joint venture and will release the name of the new company in April this year. In the next decade, the company has set a target of producing and selling more than 4 million vehicles in China.