Kia Motors, the subsidiary firm of South Korean auto giant Hyundai Motor Group has agreed to invest $1.1 Billion (Rs. 12800 Crores) in India to build its manufacturing unit. They have already signed a MoU with Andhra Pradesh Government. This facility will be developed near Eramanchi, Andhra Pradesh. Kia Motors is in the process of being the third largest company in passenger vehicle segment by 2020.

Thursday, Chief Minister of Andhra Pradesh, Mr. Chandrababu Naidu and president of Kia Motors Mr. Han-Woo Park have signed a MoU in Vijayawada. A report suggests that the company is planning to launch the facility in the last quarter of 2017. They are also going to start production from 2019. This project is including the facilities for stamping, welding, painting and assembly.

Besides the training centers, Kia is also in the process of setting up a township for its employees. This company is aiming to produce about 3 lakh of vehicles each year.

Starting from the year 2019 this company is planning to sell compact Sedan and an SUV. In India, there is a decline in the sale for Compact Sedan cars. Thus, companies like Maruti Suzuki and Hyundai Motors are launching new SUVs in India. Kia also thinks to launch their new range of Compact Sedan and SUV. These models will be especially for Indian markets.

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Kia Motors produces more than 3 million vehicles per year. They have currently 14 manufacturing and assembly units in five countries worldwide. They also generate a $45 billion turnover with 51000 employees. This company may collaborate with its parent company Hyundai for its better capacity use in India.

Andhra Pradesh is currently ranked no. 1 in ease of doing business. This step taken by the government is likely to develop the business environment in the state. Andhra Pradesh is a state which already had the collaboration with ISUZU Motors for producing pick up vehicles and SUVs. Also, Hero Moto Corp is planning to set up its plant in Andhra Pradesh. So, this collaboration with Kia Motors is a new gem for the economy of Andhra Pradesh.