In a major boost to automotive manufacturing in India, Korean company Kia Motors has decided to set up base in Andhra Pradesh with an investment of $1.1 billion.
The construction of the new facility, Kia Motors’ first in India and representing approximately $1.1-billion investment, will commence in the final quarter of 2017. The manufacturing facility is expected to begin production in the second half of 2019 and produce up to approximately 300,000 units each year.
Kia plans to produce a compact sedan and compact SUV especially for the Indian market at the new plant, which will occupy around 23 million square feet and incorporate facilities for stamping, welding, painting and assembly.
The site will also be home to numerous supplier companies’ facilities.
“We are delighted to announce that Kia’s newest manufacturing facility will be here in Andhra Pradesh,” Han-Woo Park, President of Kia Motors, said in a statement.
“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.”
The new manufacturing facility in India will enable Kia to maintain its position as one of the world’s fastest-growing automobile brands.
This will enable the company to start selling its models in India, and benefit from further sustainable sales growth, locally and internationally.
Kia plans to commence local sales of cars produced at the new facility towards the end of 2019, once mass production begins in Anantapur.
Furthermore, the region’s fast-developing supply chain network and skilled labour force were other key reasons for the new investment by Kia Motors.
India is the fastest growing major new car market and the fifth largest in the world, with more than 3.3 million new cars sold in 2016.
Forecasts suggest the country will become the third-largest car market by the end of 2020.
Founded in 1944, Kia Motors Corporation is Korea's oldest manufacturer of motor vehicles. Over 3 million Kia vehicles a year are produced at 14 manufacturing and assembly operations in five countries and sold around 180 countries.
Kia has over 51,000 employees and annual revenues of over $45 billion.