Kia Motors, the latest global entrant in the India growth story, has signed a memorandum of understanding (MoU) with the state government of Andhra Pradesh to build a new manufacturing facility in Anantapur district.

The MoU was signed today at a ceremony held in the city of Vijayawada, a part of Andhra Pradesh Capital Region, attended by executives from Kia Motors and the chief minister of Andhra Pradesh, N Chandrababu Naidu.

L-R: Solomon Arokia Raj, secretary, Industries & Commerce Department; N Amarnath Reddy, Minister - Industries, Food Processing, Agri Business, Commerce, and Public Enterprises; N Chandrababu Naidu, chief minister of Andhra Pradesh; and Han-Woo Park, president of Kia Motors.

Construction of the new manufacturing facility, Kia Motors’ first in India and representing approximately a US$1.1 billion (Rs 6,950 crore) 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.

Compact sedan and SUV for India
Kia plans to produce a strategic compact sedan and compact SUV especially for the Indian market at the new plant, which will occupy around 23 million square feet (536 acres) and incorporate facilities for stamping, welding, painting and assembly. The site will also be home to a number of supplier companies’ facilities.

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

Construction of a new manufacturing facility in India will enable Kia to maintain its position as one of the world’s fastest-growing automobile brands. The new facility in Anantapur will enable the company to start selling its models in India, and benefit from further sustainable sales growth, locally and internationally.

Kia says it 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.

Kia Motors Corporation, which was founded in 1944, 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 which are sold and serviced through a network of distributors and dealers covering around 180 countries. The company has over 51,000 employees worldwide and annual revenues of over US$45 billion (Rs 284,265 crore).

Kia's sales in March 2017
In March 2017, Kia sold a total of 238,222 vehicles comprising passenger cars, recreational vehicles and commercial vehicles.

In March, the Korean OEM posted month-on-month sales increases in the domestic Korean market (21.6 % growth with 47,621 units sold) and overseas markets (4.1% growth with 190,601 units sold).

Its best-selling model in overseas markets during March 2017 was the Sportage compact CUV with 41,781 units sold. The C-segment Cerato (known as ‘Forte’ or ‘K3’ in some markets) was the second best-seller with 25,720 units delivered, while the midsize CUV Sorento followed with 18,835 units sold.

Also read: 
Kia Motors unveils new Pegas and K2 Cross at Shanghai Motor Show