(Yicai Global) June 17 -- China's Dongfeng Yueda Kia Motor, a joint venture between Dongfeng Motor, Yueda Group and Kia Motors, will lease its first plant to new energy vehicle maker Human Horizons to cope with declining sales. 

Most of the nearly 1,000 employees of the factory in Yancheng, eastern Jiangsu province, have been transferred to other positions, an industry insider close to Seoul's Kia Motors told Yicai Global. The shutdown is expected to be finished at the end of this month, the person added. 

Renovation work for Human Horizons to move into the plant is expected to be completed in the first half of 2021, the source added. 

Kia's other factories are running as normal and can fully meet the demand, a director at Kia told Yicai Global in a phone interview, confirming the news of shifting production.

The company has three plants in Yancheng. The first factory was put into operation in 2002 with an annual capacity of 140,000. It has a lower rate of automation, which lifts the production cost of each vehicle up to 20 percent. It makes only one model and does not run on full capacity, Yicai Global learned. 

The total annual production capacity of the JV's three factories could be 890,000 vehicles per year but the firm's sales have been rapidly declining over the past few years to 370,000 units in 2018. Sales volume fell 11 percent from the previous year to 128,800 units in the period from January to May, public information shows. 

Shanghai-headquartered Human Horizons has a registered capital of CNY1 billion (USD144.4 million), and Yueda Group holds 20 percent of the equity. 

Editor: Emmi Laine