South Korea's second largest automaker Kia Motors Corp. reported its lowest-ever quarterly operating profit in seven years for the first quarter, stung by massive recalls at home and overseas, as well as the recent diplomatic row with China over Korea's deployment of the USA antimissile system. Kia will build a brand new manufacturing facility for its India operations in Anantapur, Andhra Pradesh at a cost of a whopping Rs 7050 Crore ($ 1.1 Billion).
Kia Motors, the latest global entrant in the India growth story, has signed a memorandum of understanding (MoU) with the state government of Andhra Pradesh to build a new manufacturing facility in Anantapur district.
Kia is part of the Hyundai group, which is already India's second biggest auto maker with 20% of the market.
Kia Motors has announced its foray into the Indian auto market.
Kia plans to begin selling cars in India as soon as the mass production begins in 2019. Kia is also stressing on differentiating itself from its owner company - Hyundai, in the Indian market.
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The Indian vehicle market is growing at a rapid pace and over 3.3 million new cars were sold in 2016.
Speaking on the occasion, Han-Woo Park, President of Kia Motors, said, "We are delighted to announce that Kia's newest manufacturing facility will be here in Andhra Pradesh".
Hyundai is a brand which has been known for its design philosophy and Kia Motors falls under the same bracket.
India saw domestic sales grow a little more than nine per cent to three million vehicles in the year ended March 2017. The country is expected to emerge as the third biggest market in the world by 2020, with annual volume of five million units. Once functioning at full capacity, the new Kia India plant will be able to produce 3 lakh cars annually. That is a big change from just a few years ago, when the auto makers managed to achieve double-digit growth, aided by a weak local currency, sleek designs and clever marketing. Kia Motors will subsequently also produce other models, which includes its global high-volume hatchbacks - the Picanto and Rio.
Kia India's product plans are unclear as of now.