Kia Motors is Set to Start its India campaign in AP


Kia Motors, the Korean major starts its campaign in India by setting up a $1.1-b plant in Andhra Pradesh. It plans to roll out SUV and Sedan by 2019. This gives a major boost for Chandrababu Naidu’s vision of developing Andhra Pradesh as an automotive hub.

With an investment of $1.1 billion, Kia Motors will be setting up its base in the State. In the presence of Naidu, a memorandum was signed by Kia Motors President Han-Woo Park and State Industries Secretary Solomon Arokiaraj on Thursday at Amaravati.

Kia Motors New Plant Details

Kia Motors unit will be set up on a 600-acre site at Penukonda which is about 75 km from Anantapuramu. The greenfield car manufacturing plant is going to be the South Korean company’s first unit in India. The Kia project will see an overall investment of around $2 billion after factoring in investments by vendors and associates.

The new facility will have a capacity to produce 3 lakh units a year and its construction will start in the final quarter of 2017. Production of cars is expected to begin in the second half of 2019. This project is expected to create temporary and permanent jobs for around 11,000 people.

By the end of 2019, Kia Motors plans to sell cars produced at the new facility.

Speaking on the occasion, Naidu assured to provide all support to the Korean major. He said that he was happy at Kia Motors finalizing its investment plans for India and particularly selecting Andhra Pradesh. Auto components and Automobile are important thrust areas for the growth of the state.

Han-Woo Park said, “The plant will enable us to sell cars in the world’s fifth-largest market while providing greater flexibility for our global business. Worldwide demand for Kia cars is growing, and this is our latest step towards becoming a leading global car manufacturer.”

In India, around 3.3 million new cars were sold in the year 2016. It is forecasted to become the third-largest car market by the end of 2020.

At the AP plant, Kia Motors plans to manufacture a compact SUV and a compact sedan. The plant will have facilities for painting, stamping, welding, and assembly and will occupy around 23 million square feet.

Founded in the year 1944, Kia Motors Corporation is one of the oldest motor vehicles’ manufacturers in Korea. From its 14 assembly and manufacturing operations in about 5 countries, Kia Motors rolls out more than 3 million vehicles every year. The manufactured vehicles are then sold in about 180 countries. Kia has annual revenue of about $45 billion and over 51,000 employees.

Naidu Wins

This is a big win for Naidu as he managed to beat Maharashtra and Tamil Nadu which two of India’s biggest auto hubs to the post.

During his tenure as Chief Minister between the period 1995 and 2004, he has tried to woo automotive companies to the combine Andhra Pradesh. Volkswagen and Malaysian company Proton were among the companies which were then sounded out.

Isuzu setting up a plant at Sri City, Apollo and Hero MotoCorp plans to head to AP along with Andhra Pradesh’s top ranking among states for “Ease of Doing Business” influenced Kia’s decision to zero in on the state.

Naidu not only plans to monitor the Kia Motor Plant’s progress personally but also has appointed the District Collector as the nodal officer for the project.

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