Kia to Exit Bus Business After 60 Years

Kia Corp. will exit the large-bus business it inherited from Asia Motors after about six decades, pressured by low-cost Chinese electric bus makers and tougher global emissions rules that have made profits harder to sustain.

Kia management told the union at the second working-level meeting of a joint labor-management employment stability committee on June 17 that it plans to stop producing the Granbird large bus, according to Kia’s labor union and other people familiar with the matter. The halt will come in one to two years, after the current order backlog is fully exhausted. The Granbird is the only bus model Kia still produces. Large-bus production within Hyundai Motor Group is set to be consolidated under Hyundai Motor Co.

Kia produced 1,403 Granbird buses last year. The industry views the move as part of a push to focus on electrification projects such as Kia’s purpose-built vehicle, or PBV, PV series instead of the diesel-powered Granbird. The union objected, saying it would suspend all labor-management talks and negotiations over overtime work and launch an all-out fight.

Asia Motors, once a Kia affiliate, was founded in 1965 and was long known as one of South Korea’s leading bus makers. It focused more on buses than passenger cars and built many of the city and express buses commonly seen on Korean roads in the 1970s and 1980s. Kia carried on that business with the launch of the diesel-based Granbird in 1994.

But sales in South Korea struggled to grow as the country’s transportation system shifted toward rail rather than express buses. The fading of bus tourism and bus commuting also hurt demand. Despite efforts to expand overseas sales channels, annual sales have remained at 1,300 to 1,400 units for years.

Tighter environmental standards pose an even bigger challenge. Governments around the world are strengthening emissions rules on pollutants including nitrogen oxides. Large diesel buses are especially exposed to those requirements. Complying would require more than engine tuning. It would also mean developing new exhaust after-treatment and exhaust gas recirculation systems. “It won’t be easy to make a new investment of hundreds of billions of won for annual sales of 1,400 units,” an industry official said. “From a production-efficiency standpoint, consolidating the business under Hyundai Motor makes more sense.” As of December 2025, Hyundai Motor and Kia accounted for 60% and 30%, respectively, of South Korea’s 41,000 registered charter buses. The rest were Chinese imports.

Low-priced Chinese electric buses are another concern. Chinese bus makers such as BYD already dominate the city-bus market, while the Granbird has focused on express and tour buses. But Chinese manufacturers have recently expanded into express and tour bus models as well. Backed by their own subsidies and other support, they are selling buses for tens of millions of won to 100 million won ($72,000) less per vehicle than Kia’s Granbird, which costs about 200 million won ($145,000). That leaves Kia under pressure to both electrify and cut prices to compete. The industry expects Hyundai Motor, which already has electric and hydrogen bus lineups, to take charge of the group’s bus electrification strategy.

Instead, Kia is set to sharpen its focus on businesses it sees as core growth areas. In its recent mid- to long-term strategy, the company identified electric vehicles, PBVs and software-based mobility as its main growth drivers. Starting with the PV5, Kia plans to expand its PBV lineup with models such as the PV7 and PV9, which could replace parts of its existing bus lineup. The company aims to target business-to-business markets including logistics, delivery and shuttle services.

The biggest variable in the exit is labor relations. The union is strongly opposing management’s plan to stop Granbird production. In an emergency statement issued on June 17, the Gwangju chapter of Kia’s union under the Korean Metal Workers’ Union, itself affiliated with the Korean Confederation of Trade Unions, said management must present concrete measures on job security and future investment plans to protect members’ livelihoods. A union official said it would halt all labor-management discussions and overtime negotiations and move into an all-out struggle.

Jeong Sang-won, Hankyung.com reporter top1@hankyung.com