Kia Motors’ 23 million square foot facility manufactures vehicles like its Seltos SUV for both the Indian and overseas markets.
The logo of Kia Motor. (Image: REUTERS/Kim Hong-Ji)
South Korea’s Kia Motors is discussing with Tamil Nadu the possibility of moving a $1.1 billion plant out of neighbouring Andhra Pradesh only months after it fully opened, due to policy changes last year, sources close to the talks told Reuters. Kia inaugurated the Andhra plant, its first in the world’s fifth-largest car market, in December after two years of construction. It has an annual capacity of some 300,000 units and created 12,000 direct and indirect jobs. However, Kia is now in talks with the nearby state of Tamil Nadu, home to many major auto parts suppliers, about potentially relocating the plant, a senior state government official and a second source familiar with the discussions said.
“(Kia) are facing problems (in Andhra Pradesh), they have been in preliminary negotiations with us … There is a secretary-level meeting next week, we might have more clarity then,” the official told Reuters. Kia said in a statement it has a long-term commitment to the Indian market and it aims to utilize the full capacity of its Andhra plant “before considering further expansion”. “We do not have any plans to shift the manufacturing facility from the current location,” it said, without commenting on any policy concerns or talks with Tamil Nadu, which are at an early stage.