Kia Motors Likely To Set Up Production Facility In Andhra Pradesh

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South Korean car maker Kia Motors is expected to invest as much as Rs 10,000 crore for its projects in India. The company has selected Andhra Pradesh for its first production facility in the country.

ETAuto reports that Kia has chosen Penukonda in Anantapur district in Andhra Pradesh to set up its production facility. The company is starting the process of purchasing land for the production plant.

A person aware of the development said, "The car manufacturing facility, a first for Andhra Pradesh, will involve two phases with a cumulative investment of $1.6 billion, or Rs 10,300 crore, with first phase of investment amounting to about Rs 6,000 crore."

The government has given permission to the Anantapur district collector to procure land for the project. In the initial phase, the plant is likely to have a capacity of 3 lakh units per year. The first car is expected to be rolled out by 2019.

However, Kia has refused to comment on the development as the company has not confirmed the future investments in the country. Kia has already involved with several vendors in India through Hyundai's sourcing wing Mobis.

A supplying Executive said, "We have already been intimated about understanding the logistics cost to Anantapur and accordingly quote the pricing in the future." Another vendor stated that KIA is also discussing a project codenamed as SP2.

The SP2 project is said to be an SUV, which comes under the same segment as the Hyundai Creta. The vehicle is expected to hit the market by 2019. Kia also plans to utilise the paint shop, and body shop from Hyundai's facility, as both the plants, will be located closely.

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