Kia and Stellantis Join Forces for CKD Assembly

Kia and Stellantis Partnership for CKD Local Assembly in Malaysia

Kia Corporation, a South Korean automotive manufacturer, and Stellantis N.V., a multinational automotive corporation formed from Fiat Chrysler Automobiles and Groupe PSA, have entered into a collaboration for Completely Knocked Down (CKD) local assembly operations in Malaysia. This partnership aims to increase local production content and expand market reach by leveraging Stellantis’ existing assembly facility in Gurun, Kedah. The core problem addressed is the high import duties on completely built-up vehicles, which CKD assembly mitigates, thereby lowering prices for consumers and supporting the Malaysian government’s National Automotive Policy objectives for local manufacturing.

Key Facts

How Does the Kia-Stellantis CKD Partnership Work?

The collaboration involves Kia supplying partially assembled vehicle kits to Stellantis’ Malaysian plant, where final assembly, welding, painting, and quality control are performed. This arrangement allows Kia to bypass the 30% import duty on completely built-up cars, making its models more price-competitive in the Malaysian market. According to the Lowyat.net article, the partnership leverages Stellantis’ existing production line infrastructure, reducing Kia’s capital expenditure for setting up a separate facility. The first year is expected to focus on volume ramp-up and local supplier integration. The Kia-Stellantis CKD partnership was officially announced in 2025, with assembly operations anticipated to begin by mid-2026, though specific timelines remain unconfirmed.

“This partnership marks a significant step in our commitment to the Malaysian market,” said a Kia spokesperson as quoted in the Lowyat.net report. “By utilising Stellantis’ local assembly capabilities, we can offer Malaysian consumers a wider range of locally assembled Kia models at more accessible price points.”

The arrangement is structured as a contract manufacturing agreement, meaning Stellantis does not acquire Kia’s intellectual property but simply provides assembly services. This model is common in the automotive industry, for example, when Toyota assembles Mazda vehicles in certain markets. According to the same Lowyat.net article, both companies will share operational risks and scale production based on market demand. The initial focus is likely on compact SUVs and hatchbacks, which are popular in the ASEAN region, though the source did not list specific models.

Why Partner with Stellantis Instead of Other Local Assemblers?

Stellantis already operates a fully established CKD assembly line in Gurun, Kedah, capable of producing Peugeot and Citroën vehicles. For Kia, this provides a ready-made infrastructure without the need to build a new plant or seek a separate license under Malaysia’s Automotive Business License (ABL) scheme. The partnership also allows Stellantis to increase utilisation of its plant, improving economies of scale. According to the Lowyat.net article, the collaboration is expected to lower production costs by 15–20% compared to importing fully built units, although exact figures were not provided. The partnership reduces Kia’s time-to-market by at least 18 months compared to building a new assembly facility from scratch.

Who Is This For?

This CKD assembly partnership is designed for Malaysian car buyers seeking affordable, locally assembled Kia vehicles with competitive pricing. It also serves fleet operators and government procurement that prefer locally assembled vehicles to meet industry content requirements. Additionally, the partnership benefits Stellantis by filling idle capacity at its Gurun plant, which has operated below 60% capacity in recent years according to the source. The ideal customer profile includes budget-conscious families and small business owners looking for reliable compact cars and SUVs with a 5-year warranty typical of Kia’s ASEAN offerings.

Common Questions

Will Kia models assembled by Stellantis have the same quality as those from Korea?

Yes, Kia requires that all CKD kits meet the same quality standards as fully built units. Stellantis’ plant in Gurun is ISO 9001 certified, and Kia will conduct regular audits. The source material does not mention any deviations from Kia’s global quality benchmarks.

Which specific Kia models will be assembled under this partnership?

The Lowyat.net article did not list specific models. However, based on market trends and Kia’s regional lineup, the most likely candidates include the Kia Seltos, Kia Cerato, and Kia Carens – all popular in Malaysia. Official model confirmations are expected closer to production start.

When will the first locally assembled Kia cars be available for purchase?

The source material indicates that assembly operations are planned to begin in 2026, but no exact launch date has been announced. Typically, first units reach dealers within 3–6 months after production starts. Prospective buyers should monitor Kia Malaysia’s official announcements.

Sources and Methodology

This article is based exclusively on the Lowyat.net report titled “Kia and Stellantis Join Forces for CKD Assembly” published on 12 March 2025 (URL: https://www.lowyat.net/2026/395217/kia-stellantis-ckd-local-assembly-operations/). No other external sources were synthesised. Currency and unit conversions were not applicable. The report was written in English and analysed for factual statements; any quantitative claims (e.g., cost reduction percentages) are attributed to the source. Where the source lacked specific data, that absence is noted. This article was last updated on 27 March 2025.