Kia Motors to set up 300000-unit capacity plant in Andhra Pradesh

The logo of Hyundai Motor is seen at its dealership in Seoul South Korea

South Korean automaker Kia Motors on Thursday became the latest company to try and grab a slice of the pie, announcing a $1.1 billion investment in a manufacturing plant in the Indian state of Andhra Pradesh. Kia will build a brand new manufacturing facility for its India operations in Anantapur, Andhra Pradesh at a cost of a whopping Rs 7050 Crore ($ 1.1 Billion).

Seoul, April27:Korea's second largest carmaker Kia Motors has finally announced its plans to enter the Indian vehicle market.

Hyundai Motor, the maker of Tucson sports utility vehicles and Sonata sedans, said it sold 206,000 cars in China during the first three months, down 14 percent from a year earlier.

"The Chinese market in the first quarter was hard due to Kia's conflict with local dealers and the ongoing political issue that dropped consumer demand", Han Chun-soo, Kia's chief financial officer, said during a conference call after the automaker's first-quarter earnings report.

Kia plans to begin selling cars in India as soon as the mass production begins in 2019. "We will also solidify the company's future competitiveness on a thorough localization strategy", the company said.

Kia Motors Corporation, which was founded in 1944, is Korea's oldest manufacturer of motor vehicles.

India continues to be one of the world's most promising markets as an increasing number of families can afford cars as incomes rise. The manufacturing facility is expected to begin production in the second half of 2019 and produce up to approximately 300,000 units each year.

In a major boost to automotive manufacturing in India, Korean company Kia Motors has chose to set up base in Andhra Pradesh with an investment of $1.1 billion.

In March, the Korean OEM posted month-on-month sales increases in the domestic Korean market (21.6 % growth with 47,621 units sold) and overseas markets (4.1% growth with 190,601 units sold). Kia Motors will subsequently also produce other models, which includes its global high-volume hatchbacks - the Picanto and Rio.

"This is an exciting and mutually-beneficial project and a next major step in Kia's global expansion plans", Park said on the occasion.

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