Kia’s interest in entering India with a local manufacturing facility has been in the news for quite some time now. Hyundai’s sister brand has acknowledged earlier that it is exploring several new markets and India is one of them. Today is the day, when Kia confirmed that they are entering India, with their plant to be located in the state of Andhra Pradesh.
Kia Motors, a subsidiary of Hyundai Motors, signed an Memorundum of Understanding with the state of Andhra Pradesh earlier today. As per the MoU, Kia will be setting up their manufacturing plant in the state, and investing $1.1 billion (or INR 7,055 crore).Kia India’s product plans are unclear as of now.
Construction of this new Kia plant will commence by the end of this year. The plant will be located in Anantapur, Andhra Pradesh and will be spread over an are of 536 acres. The plant is expected to be ready to roll out first car in 2019. Once functioning at full capacity, the new Kia India plant will be able to produce 3 lakh cars annually. Apart from providing cars to the Indian market, Kia will also be exporting the made in India cars.
Strategically located near the Hyundai India plant in Chennai, it is also reported that Hyundai India could use the facility to produce their own cars. Hyundai India is using their plant at full capacity, and will soon be needing additional capacity in order to sustain growth. The distance between Hyundai plant and the proposed Kia plant is less than 400 kms, making transportation of materials in between the plants a relatively easier task.The new Kia plant would be aiming to benefit from Hyundai’s existing vendor network.
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Kia Motor aims to produce cars with about 40% localization levels. It is not clear as to which Kia cars would be launched first, but a premium SUV in the range of 15 lakh is what we are expecting to come out of the Kia factory first.