South Korean automotive major Kia Motors on Tuesday commenced trial production at its India plant in Anantapur district of Andhra Pradesh with plans to commercially launch its first vehicle in the second half of 2019.
The company has invested $1 billion in the facility which has come up in Erramanchi village in Anantapur district, about 200 km from Bengaluru.
Ancillary units have invested another $1 billion in two vendor parks in the region. The total investment of $2 billion is billed as one of the largest Foreign Direct Investment (FDI) in the country in the automobile sector.
The state-of-the-art facility, which has come up over 536 acres of land in a record time of 14 months, will manufacture 300,000 vehicles annually, with the bulk of the capacity catering to the domestic market.
Kia marked the start of trial operations with a launch ceremony at the Anantapur plant, in the presence of Andhra Pradesh Chief Minister N. Chandrababu Naidu and South Korean Ambassador Shin Bongkil, President & CEO of Kia Motors Corp Han-Woo Park and MD and CEO of Kia Motors India Kookhyun Shim.
Kia Motors, the world’s eighth-largest automaker, will start the manufacturing with SP2i, an SUV based on the Kia SP Concept, first showcased at India’s Auto Expo 2018.
“The SP2 is inspired by India and combines everything Indian customers need and desire in a car. We are confident that the SP2 will redefine the SUV segment in India with its futuristic design and competitive features and pricing,” said Park.
He said India would play a singularly important role in expanding Kia Motors’ global footprint. “Commencing trial production is a significant moment that we have been preparing for, as we take on the challenges of future mobility across the country,” he said.
“Today, we officially begin our journey to become one of the top five automakers in India by 2021, with a new model that will appeal to forward-looking and outgoing Indian buyers,” said Shim.
Ambassador Bongkil hoped that Andhra Pradesh government’s business-like approach and Kia plant would bring more Korean firms to the state.
The Anantapur plant, Kia’s 15th globally, will create over 3,000 direct and 7,000 indirect jobs.
An integrated automotive production facility, it employs the latest production technologies, with more than 300 robots automating the press, body and paint shops
The plant houses a five-acre training facility that offers a Basic Technical Course (BTC) in automobiles in collaboration with the Andhra Pradesh State Skill Development Corp (APSSDC), helping develop manufacturing skills among young people.
Chief Minister Chandrababu Naidu hoped that the plant would soon expand its installed capacity to 400,000 vehicles per annum.
He said with the presence of Kia Motors and its ancillaries, the entire region from Anantapur towards Bengaluru would be developed into a strong economic hub. He hoped that the project will have a spin-off effect on the development of Andhra Pradesh, especially Anantapur as an automobile hub.
The Chief Minister said Andhra Pradesh launched dedicated automobile and auto components policy in 2015 and during the last four-and-half years attracted committed investments of Rs 40,724 crore in the automobile sector. The investors include Kia, Isuzu, Hero, Ashok Leyland, Apollo Tyres and Bharat Forge.
Kia also consolidated its Future Mobility Partnership with the government of Andhra Pradesh by handing over a new Kia Soul EV (electric vehicle). The new EV is part of Kia’s growing portfolio of advanced, eco-friendly power trains.
