Kia Motors to Build First India Car Manufacturing Plant in Anantapur District, Andhra Pradesh


After searching Asia’s third-biggest car markets for two years and across four states, the unit of Hyundai Motor company’s sister concern Kia Motors has selected Andhra Pradesh for its maiden facility. For which the South Korean car maker Kia is likely to invest as much as Rs 10,000 crore for its projects. If this comes through, it would be one of the biggest foreign direct investment projects in India. AP government On Thursday (April 13, 2017) issued orders the Anantapur district collector to acquire close to 600 acres of land in “Erramanchi village” near Penukonda on the national highway connecting Bangalore, for an “industrial park”. The government has fixed price of Rs 10.5 lakh per acre as the acquisition cost.

Kia Motor cars may invest Rs 10,000 crore in manufacturing plant Anantapur

Kia to Build First India Car Assembly Plant in Anantapur District, AP

The State government has given orders to the Anantapur District Collector for the acquisition of the land required for this plant development by using the Andhra Pradesh Land Acquisition Rules 2014. With the end of the first phase, the factory may have an ability of 3 lakh units per year and it is believed that the first vehicle will roll out of it by the year 2019.

According to reliable sources, Andhra Pradesh State Investment Promotion Board and Kia motors are discussing the agreement such that the firm can get the best incentives from this project. It is expected that a formal agreement will soon be signed by the two parties.

Kia Motors may invest Rs 10,000 crore in manufacturing 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 the first phase of investment amounting to about Rs 6,000 crore.”

  • Investments in the Andhra Pradesh

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 with a code name SP2. The SP2 project is said to be an SUV, which comes under the same segment as the Hyundai Creta. It is in South Korea with an intention to manufacture an SUV that will have the same architecture as Hyundai Creta and will belong to the same segment. Kia also plans to utilize same aggregates like the paint shop, and body shop from Hyundai’s facility, as both the plants, will be located closely.

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