Kia India has confirmed they will be building a new second manufacturing facility at Anantapur.
Andhra Pradesh as part of a major expansion to help support their upcoming new combustion vehicles and new electric vehicles. The facility will see USD 2 Billion (around Rs. 18,750 Crore) invested between Kia and suppliers. Production is expected to start in early 2030.
New Plant
The new plant will be built adjacent to the existing Anantapur plant. Anantapur is where Kia started manufacturing in India back in 2019. The new facility will be 465 acres and will include space for component suppliers.
Kia expect the new plant to have an annual production capacity of 2 lakh units. This will increase their overall production capacity across both plants in India to 6.3 lakh units, up from 4.3 lakh.
The plant will be responsible for key manufacturing operations like stamping, welding, painting and assembly. It will produce vehicles for both domestic and export markets.
Investment & Employment
The USD 2 Billion investment will go between Kia and their supplier partners. This means that the investment across both of Kia’s manufacturing plants in India will have increased to nearly USD 5 Billion.
The new project will create around 12,000 direct and indirect jobs in Andhra Pradesh. Along with the jobs provided by the existing Anantapur plant and suppliers, this could mean over 36,000 jobs are created.
The existing Anantapur plant and supplier facilities are 945 acres. The new plant will double this to 1,410 acres.
New Combustion & Electric Vehicles
Kia have confirmed that they will not only be producing EVs at the new plant but will also be producing new petrol, diesel and battery powered vehicles.
This is key for India as there is still varying price points, availability of fuel, charging infrastructure and usage. Having a combustion plant in place means Kia will be able to offer new models without relying solely on EVs.
Currently Kia have a wide range of different powertrains in India including petrol, diesel, CNG, hybrid and electric. The new plant will ensure that Kia have a variety of powertrains into the future.
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Existing Anantapur Plant
Kia’s first plant in India was built with an investment of USD 2.9 Billion. They currently produce the Seltos, Sonet, Syros, Carens, Carens Clavis, Carnival and Sorento. The plant provides 24,237 direct and indirect jobs.
The facility has played a huge role in Kia’s success in India. Since starting production in 2019 Kia have gone from being a new entrant to becoming one of the most prominent passenger vehicle manufacturers. Their range now includes a wide variety of vehicles from small SUVs, MPVs and premium vehicles.
The new plant will not replace the existing plant but will increase production capacity and allow Kia to offer new models.
India is Key
“India is core to our long-term growth strategy. The new facility will give us more agility and responsiveness to customer demand and allow us to launch new combustion and electric vehicles,” said Kia India Managing Director and CEO Gwanggu Lee.
This shows how important it is to increase production capacity and prepare for the new range of models. As demand for passenger vehicles in India continues to change, manufacturers need to increase their production and offer lots of flexibility to add new body styles, powertrains and technology.
Anantapur already have good supplier relationships, skilled workforce and logistics meaning it makes sense to expand here. Being adjacent to the existing plant will also mean it shouldn’t be too complicated to set up.
What Does This Mean For Customers?
Customers in India can look forward to seeing a wider variety of Kia vehicles. There will be more combustion vehicles including petrol and diesel. New EVs will also be added to Kia’s range for India.
Having increased production means popular models may become more available. More importantly local production means Kia have more control over pricing.
For EV customers the new plant means Kia are looking to increase their EV presence in India. Local production may mean they have more competitive pricing on future Kia EVs.
Future
Kia will start vehicle production at the new plant in early 2030. This means they will have a few years to develop and localise their next range of models. The investment will also mean Andhra Pradesh is becoming a more important manufacturing hub.
By investing in both combustion and electric vehicles Kia are adopting a balanced approach to India’s move to electrification. This means they can keep their strengths but also increase their production.
Kia have invested nearly USD 5 Billion in total, increased employment and are looking to increase their production to 6.3 Lakh units per year. This is one of the biggest manufacturing expansions by any global manufacturer in India.
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