The South Korean second best automotive brand Kia Motors has made its first move to enter the Indian hub of commercial vehicles, with a whopping investment of $1.1 billion. It has invested in setting up the plant in Anantapur district of Andhra Pradesh expected to start its production by 2019. The plant has a capacity to produce 30 thousand products/year. Rather than beginning with the import of completely built units to India, as it increases the overall price of the vehicles dramatically high, the company has decided to set its foot on our lands for the production and sales purposes.
The move might be attributed to the dropping sales in our neighbor country China, where its market share slumbered down by 2.2% and a 19% decline in the net profit due to an anti-Korean attitude that has developed amongst the Chinese dealers. Also, the company had a major monetary hit of $143 million due to the call back of the vehicles due to engine issues in North America and S. Korea.
Kia has the hand of its Godfather company Hyundai with it. Kia's products will be sold via already existing India's second best auto manufacturing company Hyundai's dealership networks. It might begin its journey from Tamil Nadu dealerships. It is expected to launch a compact sedan and an SUV first in India, though the details of which model will come to India hasn't been revealed yet.
"Our new India plant will enable us to sell cars in the world's fifth-largest market while providing greater flexibility for our global business," Kia Motors President Park Han-woo said.
