Kia Motors closes in on first factory in Andhra Pradesh

Kia Motors has been looking to enter the country, and Andhra Pradesh is being looked at as the site for its first factory.

Kia Motors is about to close in on a site for its first factory in India, in the state of Andhra Pradesh, according to sources close to the matter. There have been talks surrounding a possible entry of the South Korean automaker in the Indian market, but this news is as close as we have got so far to actually seeing Kia set up shop. In 2016, an Andhra Pradesh government official had told Reuters that the state is being considered closely for a Kia Motors plant. The state was under consideration give that it is adjacent to Tamil Nadu, where another South Korean automaker, Hyundai, has its own factories.

Kia Motors will likely be choosing a factory spot in the Ananthapur district of the state. The Andhra Pradesh government had offered a 600-acre land area to Kia for operations, according to the source. Another source also said that Andhra Pradesh would likely be chosen as the site of Kia s factory. Kia Motors, along with Hyundai, are both looking at bolstering their performance through new operations after seeing poor sales in the past few years. The United States, now under the Trump administration, is also likely to shut out foreign players and employ restrictive foreign trade policies in a bid to strengthen its domestic industry. Also Read: Kia Sportage & Soul spotted testing in India; may launch by 2018

Given the current economic challenges around the world, India would seem like a good market to enter and bring in sales. Hyundai has seen strong sales in the country, and Kia Motors could be looking to tap into its supply chain in order to reach out across the country. Supply chain and network support is a major concern due to the current limitations of India s infrastructure and its vast geography. Despite this and many other challenges, India is still on the path of becoming among the three biggest automotive markets in the next 3 years.

In keeping with India s market conditions, Kia Motors may be looking to manufacture small SUVs and sedans, with a possible start date in July 2019. Park Han-woo, CEO of the company, has already said before that Kia Motors is searching for a site to step up a factory in India. He said, “Preparations are going well. We are ready to break ground on the factory anytime.”