The company has signed MoU with Andhra Pradesh Government.
Amaravati: The Seoul-based Kia Motors Corporation today signed a Memorandum of Understanding (MoU) with Andhra Pradesh government for setting up a car manufacturing plant in Anantapuramu district.
The tie-up is expected to give a major boost to the state's efforts to emerge as an industrial manufacturing hub. The plant, to come up on a 600-acre site at Penukonda, about 75 km from Anantapuramu, will be the South Korean company's first unit in India and the seventh in the world.
Kia Motors President Han-Woo Park signed and exchanged the MoU with AP Industries Secretary Solomon Arokia Raj in the presence of Chief Minister N Chandrababu Naidu and Industries Minister N Amarnath Reddy.
Kia will invest USD 2 billion on this plant which will have a capacity to manufacture 3 lakh cars per annum. "This is an exciting and mutually-beneficial project and a next major step in Kia's global expansion plans," Park said on the occasion.
The work on the plant would commence in September and the production of cars would start in the second half of 2019, he said. The company currently had a presence in 80 markets worldwide.
"Kia will be a strong new force in the Indian automobile market. It will be a strong boost to the Indian automobile industry," Park remarked. "This is a significant step in my effort to turn Andhra Pradesh into an automobile manufacturing hub," the chief minister said.
"It's a historic day today and the strong bond between AP and Kia will endure," Chandrababu said. Kia would provide direct employment to nearly 10,000 people once the plant becomes fully operational.
The company plans to produce a 'strategic' compact sedan and a compact SUV, especially for the Indian market, at the new plant. The state government will provide training through the Skill Development Corporation to create the required human resources for the plant.
Kia is the second big ticket investment in AP in the last three years in the automobile manufacturing sector after the Hero Motors plant in Chittoor district. Isuzu, another car maker, also has its production unit in Chittoor district of the state.