KIA confirms India entry, $1.1 billion investment announced

South Korean Automaker Kia, the subsidiary of Hyundai has officially announced its India entry by signing a memorandum of understanding (MOU) with the State Government of Andhra Pradesh, India to build a new manufacturing facility in Anantapur District.

Kia has been planning to enter the Indian market for quite some time but postponed their entry as the company could not finalise their strategy for the Indian market.

Kia will start its innings in India in 2019 and plans to produce a strategic compact sedan and compact SUV especially for the Indian market.

The new products will be built at the new plant, which will occupy around 23 million square feet (2.16 km2 / 536 acres) and incorporate facilities for stamping, welding, painting and assembly. The site will also be home to numerous supplier companies’ facilities.

The facility will be also shared with Hyundai, who also plans to introduce a sub 4 metre SUV to take on the like of Ford Ecosport and Maruti Suzuki Vitara Brezza.

Kia Motors claims that the construction of its first manufacturing facility leads to an approximate investment of US$1.1 billion investment, and will commence in the final quarter of 2017. The manufacturing facility is expected to begin production in the second half of 2019 with an initial capacity to produce 300,000 units per year.

The company signed the MOU 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, Nara Chandrababu Naidu.

Kia 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 labor 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.

We can expect the entire global line-up to be introduced in the Indian market in a phase manner as Kia and Hyundai cars share platforms, component and powertrains and will like to take advantage of economies of scale.

Kia global model range

Kia globally sells the Sedans such as Optima, Optima Hybrid, Cadenza & K900. The Crossover/Minivans include Soul, Soul EV, Niro, Sportage, Sorento and Sedona. The compact car portfolio includes Rio, Rio hatchback, Forte, Forte hatchback and Forte Koup.

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