Kia Motors to storm into Indian auto market; to build manufacturing facility in AP
Seoul ,April27:Korea’s second largest carmaker Kia Motors has finally announced its plans to enter the Indian car market. Kia will build a brand new manufacturing facility for its India operations in Anantapur, Andhra Pradesh at a cost of a whopping Rs 7050 Crore ($ 1.1 Billion). Construction of the new factory will begin in the third quarter of 2017 with a production rollout slated for 2019. The plant will have an installed initial annual capacity of 300,000 units.
The South Korean automaker and its associates will invest more than $2 billion (Rs.12,800 crore) in the state, generating over (Rs. 10,000 direct and indirect jobs, they said.
Chief minister Chandrababu Naidu and Kia Motors president Han-Woo Park are scheduled to sign the pact in Vijayawada, the people said.
Park had led Hyundai Motor’s India operations in 2010-2012.
The company has said it will locally manufacture Kia cars for India, and two compact models will lead that for starters. Kia’s compact sedan will rival the likes of the Honda City and the Maruti Suzuki Ciaz, besides cousin Hyundai Verna. The compact SUV (which could be under 4-meters in length) is likely to be an all-new model. Kia Motors will subsequently also produce other models, which includes its global high-volume hatchbacks – the Picanto and Rio. The Rio sedan is likely to be the compact model mentioned earlier. body style vehicles in the facility depending on public response and sales.
Making its India plans official, 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.”
The statement speaks volumes as it also points to India becoming a future hub for Kia cars worldwide. That will be step two though, as initially Kia will want to focus heavily on gaining a foothold in India. Kia is a subsidiary of the Hyundai-Kia Group, and is one of the world’s largest mass-market automakers. It has been eyeing an India market entry for a few years now. In fact, last year we brought you some exclusive news about Kia’s India plans and how it planned to go about its entry. We also brought you some information about its likely product line-up, pricing and model positioning strategy. With Kia Motors’ entry into India, the Hyundai Group as a whole will naturally eye a larger share of this market.
Kia Motors’ new factory will be spread over 536 acres (2.16 sq. kms) and will have a manufacturing operation that incorporates stamping, welding, painting and final assembly facilities. The Kia factory site will also have several suppliers setting up shop in the vicinity of the plant, though several of Hyundai’s suppliers may also supply to the plant. This is because Hyundai’s Chennai manufacturing and vendor base are under 500 kms from the Anantapur site, and Hyundai/Kia share vehicle platforms and components. Kia Motors currently produces 3 million cars worldwide, and the Indian factory will be its 15th manufacturing facility globally.