South Korean automobile manufacturer Kia Motors has entered into a Memorandum of Understanding (MoU) with the State government for setting up a car manufacturing unit at Penukonda in Anantapur district.
Kia Motors, headquartered in Seoul, will invest $2 billion on this plant, which will be first unit in India and seventh in the world. Kia plans to produce a ‘strategic’ compact sedan and compact SUV, especially for the Indian market, at the new plant and produce three lakh cars per annum.
The plant capacity can be enhanced to 4 lakh units per annum, and the company is targeting to sell 90% of its cars produced from this plant in domestic market.
Kia Motors President Han Woo Park signed the MoU with Andhra Pradesh Industries Secretary Solomon Arokia Raj in the presence of Chief Minister N Chandrababu Naidu and Industries Minister N Amarnath Reddy, at Secretariat on Thursday.
Mr. Park said this was an exciting and mutually-beneficial project and a next major step in Kia's global expansion plans. Work on the plant would commence in September and production of cars would start in the second half of 2019, he said.
Assuring that the State government will extend all possible cooperation, Mr. Naidu asked Kia Motors to start trial production by end of 2018 or at least first quarter of 2019. “This is a significant step in my effort to turn Andhra Pradesh into an automobile manufacturing hub,” he said.
