Kia India has announced plans to invest approximately $2 billion in Andhra Pradesh to establish an additional manufacturing facility, marking a major expansion of the South Korean automaker’s manufacturing footprint in India.
The investment announcement was made by Gwanggu Lee, Managing Director and Chief Executive Officer, Kia India, at the 31st CII Partnership Summit in Visakhapatnam on Thursday.
The proposed facility is expected to increase Kia India’s annual production capacity from the existing 4.3 lakh vehicles to 6.3 lakh vehicles, strengthening the company’s ability to cater to domestic demand as well as expand exports.
The project is also expected to generate around 12,000 direct and indirect employment opportunities, providing a significant boost to Andhra Pradesh’s automobile manufacturing ecosystem.
Second plant in Anantapur
The proposed investment will be made by Kia and its supplier partners, with the new facility planned in Anantapur district. The plant will come up on approximately 465 acres, including land earmarked for suppliers.
The facility will manufacture vehicles powered by both internal combustion engines and electric motors, adding 2 lakh units to Kia India’s existing annual production capacity of 4.3 lakh vehicles.
Production at the new facility is expected to begin in early 2030, according to Reuters. The expansion will enable Kia to introduce new models and cater to growing demand in India and overseas markets.
With the proposed investment, Kia’s combined investment across its two Indian manufacturing facilities, including supplier investments, is expected to reach around $5 billion.
India to become a global manufacturing and export hub
Kia India is looking to strengthen India’s position in its global manufacturing and export strategy, leveraging the country’s growing automobile market and manufacturing ecosystem.
Kia India, Managing Director and Chief Executive Officer, Gwanggu Lee, said the investment reflected the company’s long-term commitment to India and its ambition to transform the country into a global manufacturing and innovation hub.
The company has set a target of achieving annual sales of 4.1 lakh vehicles in India by 2030. It has also highlighted its rapid growth in the domestic market, having crossed the one-million-unit sales milestone within four years and pursuing a target of two million units within seven years.
Kia’s existing manufacturing facility in Anantapur commenced mass production in August 2019, with the Seltos being its first India-made model. The plant currently manufactures several models, including the Seltos and Sonet, for domestic and export markets.
The facility has an annual production capacity of 4.3 lakh vehicles and has emerged as an export base, shipping vehicles and kits to nearly 100 countries.
The proposed expansion is expected to further strengthen Andhra Pradesh’s position as an automobile manufacturing destination, while creating opportunities for auto-component manufacturers, suppliers and ancillary industries.
The announcement at the CII Partnership Summit is also a significant addition to Andhra Pradesh’s efforts to attract large-scale manufacturing investments and generate employment through industrial development.