Kia Motors India has issued an official statement regarding the recent reports about the company moving its $1.1 billion manufacturing facility out of Anantpur vicinity in Andhra Pradesh. The reports stated that the company was unhappy with the policy changes last year and was in talks with the Tamil Nadu government. However, the company has refuted all the reports as being untrue, stating that the carmaker is getting full support from Chief Minister Jagan Mohan Reddy-led Andhra Pradesh government and has long term plans to produce cars in the Anantpur plant.
Kia has invested $1.1 billion in the manufacturing facility at Anantpur, Andhra Pradesh
The statement issued by Kia Motors India says, "The recent reports about the relocation of our manufacturing facility outside of Andhra Pradesh are not true. We are receiving full support from the State Government of Andhra Pradesh under the dynamic leadership of Shri Jagan Mohan Reddy. Kia has a long-term commitment to the India market and has made an investment of $1.1 billion in the manufacturing plant at Anantpur. We will continue to offer world-class, made-in-Anantpur vehicles and innovative mobility experience to our valuable customers in India. Request consumers to refrain from reports which do not cover these facts."
An earlier report stated that a senior state government official and a second source familiar with the discussions have said Kia is in talks with Tamil Nadu, which home to many major auto parts suppliers, about potentially relocating the plant. The previous reports also stated that Kia has been troubled by a new Andhra state law on local hiring and by the new state government wanting to review the incentives given out by the previous administration to encourage the company to set up the plant. Moving the plant to Tamil Nadu could also help Kia in reducing logistics costs as it would bring it closer to some of its parts suppliers.
The Kia plant has an annual capacity of some 300,000 units and created 12,000 direct and indirect jobs. The plant currently manufactures the newest and one of the best-selling compact SUVs in India, the Kia Seltos, along with the Carnival premium MPV, which was recently launched at the Auto Expo 2020.