Kia Motors Corp. has reached a deal with the state of Nuevo Leon on incentives for its production facility in Mexico.

Industry sources say that, Kia , South Korea’s second-largest automaker, and the state government signed incentives an last week that slashed the benefits the company received from a previous deal signed in 2013.

According to Reuters, Nuevo Leon’s economy minister said the deal reached would reduce the incentives from 28 percent of the amount invested by Kia to 10.5 percent.

Kia Motors denied that report, saying it had never been promised to receive 28 percent of investments as incentives. The company went on to say that the latest deal did include incentives on infrastructure including electricity and industrial water.

The details of the current deal were not made public, nor were the particulars of the 2013 agreement at that time. Published reports indicated, however, that Kia was promised $400 million in incentives in 15 areas including various tax and infrastructure benefits.

But Kia Motors requested renegotiation after a new governor was elected for Nuevo Leon in June 2015.

Another source said that the latest deal involves Kia Motors relinquishing some of the promised tax benefits in exchange for more infrastructure incentives.

Kia Motors has invested $1 billion to build a manufacturing facility in Mexico. The plant started mass production of the K3 compact sedan in May. A Kia spokesperson has said that plans call for the plant to be expanded to increase annual production capacity to 300,000 units.