South Korean Auto Giant Kia to Start Production from Andhra Pradesh Manufacturing from July 2019

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South Korean automotive major Kia Motors, which is commencing trial production at its India plant at Anantapur in Andhra Pradesh, will launch its first vehicle after July this year, a top company official said.

The first offering of the world’s eighth largest auto maker for the Indian market will be SP2 concept, a SUV which was showcased at the New Delhi Auto show last year.

“We have already invested $1 billion in this facility while another $1 billion would have been invested by vendors,” Manohar Bhat, Head, Sales & Marketing Group, Kia Motors India, said on the eve of the trial production ceremony.

Kia motors along with the auto ancillaries from South Korea is one of the largest Foreign Direct Investment (FDI) in India in automobile sector.

The Greenfield facility will have installed capacity of 300,000 vehicles annually from day one, Bhat said.

The 75-year-old company plans to have three launches in the Indian market in one-and-half year. SP2 concept will be launched in petrol and diesel. The plant is also capable of producing electric vehicles.

“After 6 months we will come out with second vehicle, may be after 6-9 months third vehicle, and likewise fourth. In the shortest possible time we intend to have 4-5 models.”

SP2 will compete with Renault Duster, Maruti Suzuki S-Cross and Hyundai Creta with same price range of Rs 9 lakh to Rs 17 lakh.

Bhat said since SUV was fastest growing segment, they felt that this was the best segment to enter but the company had variety of models.

“We have a wide range. We have MPVs, hatchbacks, sedans, super hatches, we have large SUVs. We are still looking at what exactly we have to bring taking into account the state of Indian market and what consumer wants.”

He believes design and quality would be the differentiator for Kia in India like in US, Europe and other markets in the world. “Our products appeal to young professionals and to the young at heart. That is our DNA. First vehicle and others will carry the same DNA and philosophy.”

Kia Motors, which manufactures nearly 3 million vehicles globally every year, had signed an MoU with the Andhra Pradesh government in April 2017 to set up the plant. The construction started towards the end of 2017 and the 214-hectare completed a month ahead of scheduled.

Anantapur plant, which is Kia’s 15th plant worldwide, currently employs 1,300 people and the number will go up to 3,000 once it attains capacity of 300,000 vehicles annually.

The bulk of the capacity will be for domestic. “We are focusing on domestic market. Exports is only an afterthought. We are not really focusing on that,” he said.

Two vendor parks have come up near the plant.

“Task for us now going forward is to ensure that the quality in terms of processes, materials and everything is right up to where we want it to be. Worldwide we are renowned for quality of vehicles. For example in US, which is the toughest market in the world, we are ranked number in quality by JD Power Ratings for last four years.”

Bhat said localisation of their products would be to the greatest extent possible. “We will give a vehicle everyone will want to own. It will be real value for money.”

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