Kia Motors invests in India by opening a new manufacturing plant

May 05, 2017

South Korea’s Kia Motors, a unit of automobile firm Hyundai Motor Co is expanding into India, one of the fastest growing markets in the world. Kia Motors signed a memorandum of understating (MoU) with the Andhra government for setting up a automobile manufacturing facility at Erramanchi in Anantapur district, 150 kms from Bengaluru. The work is likely to start by October and production is expected to begin by July 2019.

The MoU was signed at a ceremony in Vijayawada, in the presence of Andhra Pradesh chief minister N Chandrababu Naidu and Kia Motors president Han-Woo Park. During the ceremony, Chandrababu Naidu said that the project boosts the national Make in India campaign to develop the country as an international manufacturing hub.

"Worldwide demand for Kia cars is growing and this is our latest step towards becoming a leading global car manufacturer. It will enable us to sell cars in the fifth largest market of the world while providing greater flexibility for our global business," said Han-Woo Park, the Kia Motors president.

Hyundai Motor is the second largest automaker in India after Maruti Suzuki so Kia Motors is planning to use Hyundai's auto supply chains, logistics system, as well as its market experience.

The company will invest about $1.1 billion to build its first plant in India and it will be having an annual capacity of making 300,000 vehicles. The project is expected to create employment for over 11,000 people. The entry of Kia Motors in India will raise its annual overseas production capacity to 2.26 million units.

Initially, the Kia motors will be manufacturing compact sedan and SUVs for the Indian market at the new plant. Kia's new Indian car models will compete with models from Maruti Suzuki, Tata Motors, Honda etc.

India is considered as fastest growing major new automobile market with 4 million new cars sold in 2016 and it is predicted that it will rise to almost seven million by 2022.

May 05, 2017

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