Dongfeng-Yueda Kia planning own sub-brand

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This report from Bloomberg via the Korea Herald seems to indicate that Kia may also be planning to start its own sub brand alongside Nissan, Honda and GM for the Chinese market. It could be that the language used is unclear (we’ve highlighted the important part) and seems to suggest further development of Kia China models, or it could be a spin off brand from Kia. Kia originally entered China with a company called Yueda as its partner, Yueda is a Chinese conglomerate that specializes in a whole host of businesses from textile manufacturing to tractor production, obviously car production was yet another offshoot. Dongfeng later bought into the joint venture but the Yueda name stayed in the company name.

Kia Motors Corp’s China venture will invest about $150 million on a research and development center to produce its own brand of cars, according to the parent of the Chinese partner.

The venture, Dongfeng Yueda Kia Motors Co., will start construction this year and will complete building the center by 2015, Jiangsu Yueda Group Co.’s Vice Chairman Shao Yong said in an interview in Beijing.

Automakers including General Motors Co., Volkswagen AG, and Kia are expanding in China after overall auto sales surged 32 percent to a record 18.06 million in 2010, helping China stay the world’s largest vehicle market for the second year running.

Kia Motors, Korea’s second-biggest automaker, said net income rose 4.6 percent to 631.4 billion won ($564 million) in the fourth quarter. The carmaker said previously it plans to boost sales in China by 29 percent this year to 430,000 units.

Shao told reporters in Beijing that Jiangsu Yueda Group plans to almost double its sales to 120 billion yuan ($18 billion) by 2015, from 62.3 billion yuan last year.

If Kia really is planning a sub brand, it seems that the market is now getting a little silly with economy brands launching even more economy sub brands, or it could be that Kia is planning to pitch itself at a higher segment within the market over the next few years and plans to push its more economy models such as the forthcoming Rio and Morning models off to different brands? Only confusion and no real news at this stage, we will keep you updated.