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Kia Motors to invest $1.1bn for car manufacturing plant in India

Published 28 April 2017

South Korean automobile manufacturer Kia Motors is set to enter the Indian car market by investing $1.1bn to build its first factory in the country.

The company signed a memorandum of understanding (MOU) with the State Government of Andhra Pradesh, India to construct a new manufacturing facility in Anantapur District.

 Construction of the plant is expected to begin in last quarter of 2017 and production could begin as early as the third quarter of 2019.

The new plant could occupy about 23 million square feet or 536 acres of land and it will include stamping, welding, painting and assembly facilities.

Kia Motors plans to produce compact sedans, compact SUVs, specially designed for the Indian market.  The company opines that with the construction of the new facility in India, the company seeks to maintain its position as a quickly growing automobile brand in the world.  

Kia Motors president Han-Woo Park said: “We are delighted to announce that Kia’s newest manufacturing facility will be here in Andhra Pradesh.

“It 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.”

Sales in the country could begin by the end of 2019, when mass production of the vehicles commences at the plant. The company says that the fast growing supply chain network and skilled labour force are one of the main reasons for it to invest in the state.

However, the number jobs being created at the new site were not mentioned by the company.

Image: (From left) Andhra Pradesh Minister for Industries, Food Processing, Agri Business, Commerce, and Public Enterprises, N. Amarnath Reddy; Industries & Commerce Department Secretary Solomon Arokia Raj; Andhra Pradesh Chief Minister Nara Chandrababu Naidu and Kia Motors president Han-Woo Park. Photo: Courtesy of Kia Motors Corporation.