AP gets 7000Cr Kia car plant

​Amaravati: The three-decade old dream of Andhra Pradesh to have a full-fledged car manufacturing facility finally came true on Thursday when South Korea’s Kia Motors signed an agreement with the AP government to set up Rs 7,000-crore, Greenfield plant in the backward district of Anantapur.

The work on the plant, to be established in 600 acres at Erramanchi village in Anantapur district, is slated to begin towards the end of 2017 and the first batch of cars will roll out from the facility in the second half of 2019. Eventually, the plant will have a total production capacity of 3 lakh units.

The Seoul-based Kia Motors Corporation, a sister concern of Hyundai Motor which is already present in India, signed a Memorandum of Understanding (MoU) with Andhra Pradesh government for the new plant.
Kia Motors President Han-Woo Park signed and exchanged the MoU with AP Industries Secretary Solomon Arokia Raj in the presence of Chief Minister N Chandrababu Naidu and Industries Minister N Amarnath Reddy.

Though AP government, in a statement, said that the mega project would involve a total investment of $2 billion (Rs 12,800 crore) and generate 11,000 jobs, an official release from Kia’s Seoul headquarters pegged the proposed investment at $1.1 billion (Rs 7,052 crore). Nonetheless, the partnership is expected to give a major boost to AP's efforts to emerge as a manufacturing hub.

"This is a significant step in my effort to turn Andhra Pradesh into an automobile manufacturing hub. It's a historic day today and the strong bond between AP and Kia will endure," Chandrababu Naidu said after the MoU signing ceremony.

The Chief Minister further said automobile and auto-components would remain a very important thrust sector for the growth of Andhra Pradesh. “AP is poised to become a very strong hub for automobile sector in India. Our overall target is to employ at least 2 lakh in the sector by 2020,” he said.

The government believes that with the presence of Kia Motors and its ancillaries, the entire region from Anantapur towards Bengaluru will be developed into a strong economic hub. Besides this, the project will have a spin-off effect on industrial development and employment in backward areas within Andhra Pradesh.

The Chief Minster said that he would personally monitor the progress of the project every 4th Monday and appointed the District Collector of Anantapur as the nodal officer for the car project. The AP plant will be the South Korean company's first unit in India and the seventh in the world. It will have facilities for stamping, welding, painting and assembly.

"This is an exciting and mutually-beneficial project and a next major step in Kia's global expansion plans," Kia’s Han-Woo Park said on the occasion.The company currently had a presence in 80 markets worldwide. "Kia will be a strong new force in the Indian automobile market. It will be a strong boost to the Indian automobile industry," Park remarked.

The company plans to produce a 'strategic' compact sedan and a compact SUV, especially for the Indian market, at the new plant. The state government will provide training through the Skill Development Corporation to create the required human resources for the plant. Kia Motors will also establish a township for their employees.

Kia is the second big ticket investment in AP in the last three years in the automobile manufacturing sector after the Hero Motors plant in Chittoor district. Isuzu, another car maker, also has its production unit in Chittoor district of the state.