Kia invests $1 billion to build cars in India

Kia invests $1 billion to build cars in India

Kia invests $1 billion to build cars in India

The global production capacity of Kia Motors will total 3.85 million units a year with the completion of the factory, the company said.

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.

Kia Motors wants to achieve a localisation level of 40% at launch.

Korean small vehicle maker Kia Motors has finally announced it would be entering the Indian auto market, with an investment of $1.1 billion (about Rs 7,000 crore). The company will invest this money in building a manufacturing facility in Anantapur, Andhra Pradesh.

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The plant, Kia's first in India, will come up in Penugonda in Anantapur district and produce three lakh cars a year. Kia will also export cars from this facility, akin to Hyundai India's business plan.

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Kia was earlier undecided between Andhra and Tamil Nadu, where Hyundai's units are located.

The automaker plans to produce a strategic compact sedan and compact SUV for the Indian market at the new factory, which will occupy around 23 million sq ft and incorporate facilities for stamping, welding, painting and assembly.

Kia and its larger affiliate Hyundai Motor Group are the world's fifth-largest auto company.

India continues to be one of the world's most promising markets as an increasing number of families can afford cars as incomes rise. Industry experts predict the South Asian nation will be the world's third largest vehicle market by 2020.

SAIC, biggest auto maker in China, and France's PSA are also preparing for an India entry. It has been eyeing an India market entry for a few years now.

More than three million passenger vehicles were sold in India in the financial year ended March 31, almost 10% more than the previous year, according to the Society of Indian Automobile Manufacturers.

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