Kia India is gearing up for an expansive phase in its manufacturing business with the South Korean car giant looking to invest USD 2 billion (Around Rs 18,750 crore) into setting up a new plant in Andhra Pradesh. The company has inked a pact with the Government of Andhra Pradesh to set up its second manufacturing plant in Anantapur.
The investment will be made by Kia and its supplier partners. This new plant will boost the company’s production capacity by up to 2 lakh units. As a result, Kia will be able to manufacture more vehicles within India, one of the fastest growing automobile markets in the world.
Interestingly, the plant will be for both ICE and electrical vehicles. This means Kia are looking to boost their range of traditional vehicles but also increase their focus on electrification. Demand for SUV, hybrids and electrical vehicles is increasing in India so the new plant will help boost Kia’s product strategy moving forward.
Kia already have a manufacturing facility in Anantapur, Andhra Pradesh with the current plant producing popular models. The new plant will boost their manufacturing capabilities and could also bring more opportunities for component suppliers.
Having increased production by up to 2 lakh units, Kia can now be more flexible with their new model introductions and also increase their customer demand. This also shows how confident Kia are about India’s future growth in the automotive sector.
For the EV market in India, it is an interesting time for Kia as the new plant will be focused on producing electric cars. Kia have been increasing their electric vehicle range globally so having more manufacturing facilities in India could be an important factor for the company when considering their future electrification strategy.
Kia committing to investing around Rs 18,750 crore in the new plant in Andhra Pradesh will be an exciting time for the automobile manufacturing industry in India. This will help boost the state into becoming a strong automotive manufacturing hub and will also give Kia more capacity to compete in the traditional and electric vehicle market.