South Korean car company Kia Motors Corp. announced it will open a new factory in Mexico. The new plant is projected to build hundreds of thousands of cars and will help expand Kia's presence in the United States and Latin America.

Mexican President Enrique Pena Nieto announced the construction of the more than $1 billion factory alongside Kia Vice President Lee Hyoung-Keun in an event in Mexico City, according to Bloomberg.

The company will attract $1.5 billion from Kia suppliers and will lead to the annual production of around 300,000 cars. The factory, the Kia vice president said, will be finished in the first half of 2016, reports Bloomberg.

"Having a Korean company enter Mexico will mean that practically all global automakers will be represented in the country," Armando Soto, president of Kaso & Asociados, a Mexico City-based auto industry consultant, told Bloomberg. "It will also trigger large investments from Korean auto-parts companies."

The construction of the new factory, which is slated to be built in the town of Pesqueria, near Monterey, in Nuevo Leon state, would push Mexico's automotive construction output over the 3 million-car mark.

According to the Los Angeles Times, other car companies have also announced plans to begin building auto factories in Mexico. BMW and Audi both announced the construction of new billion-dollar plants and Mercedes-Benz alongside Nissan will open a factory for their shared use.

Other car manufacturers in Mexico include Ford, Honda, Mazda, Volkswagen and General Motors. However, the new factories would push Mexico from its current place as the world's eighth largest auto producer to the sixth by 2020.

"We celebrate that Kia Motors has decided to join in the success story that we Mexicans are writing," said President Nieto.

The factory will also help Kia meet demand for certain models like Soul in the U.S. and potentially introduce the smaller Rio to the Latin American market, reports the Los Angeles Times.