AP Signs MOU with World's Fifth Largest Automobile Company

AP Signs MOU with World's Fifth Largest Automobile Company

AP Signs MOU with World's Fifth Largest Automobile Company

"We are delighted to announce that Kia's newest manufacturing facility will be here in Andhra Pradesh", said Han-Woo Park, President of Kia Motors.

Kia Motors, a subsidiary of Hyundai Motor, is set to sign a memorandum of understanding with the Andhra Pradesh government on Thursday to build a manufacturing facility in the southern state, people in the know of the matter said.

With parent Hyundai Motor operating at its peak capacity in India, Kia is likely to share manufacturing with Hyundai in the future to have better capacity utilisation and breakeven faster.

The work on the plant would commence in September and the production of cars would start in the second half of 2019, he said. The Korean auto maker will invest close to Rs 7,000 crore to build the facility with an annual production capacity of 3 lakh units. On the cards are a compact sedan and a compact SUV that will comprise of Kia's initial product portfolio in India. The site will also be home to numerous supplier companies' facilities, the company said.

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Founded in 1944, Kia Motors is Korea's oldest manufacturer of motor vehicles and manufactures over three million vehicles a year at 14 manufacturing and assembly operations in five countries.

Kia Motors, the nation's second-largest automaker, saw its profit tumble in the first quarter, affected by soured consumer sentiment in China as well as a stronger local currency against the US dollar.

Andhra Pradesh Government has entered into an MOU with South Korea-based Kia Motors which is World's Fifth Largest Automobile Company to establish its first-ever plant in India. "Worldwide demand for Kia cars is growing and this is our latest step towards becoming a leading global vehicle manufacturer". Bhargava says the Indian market has the potential to grow to up to ten mn units annually in the coming years and no other country can offer such an opportunity.

"Through the construction of a factory in India, Kia Motors will pioneer India's auto market, which is under the spotlight as the next growth market".

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