South Korean auto major Kia Motors Corp is close to finalising Andhra Pradesh as the site for its first factory in India, as it speeds up efforts to start production in the fast-growing market, a source familiar with the matter said.
According to reports Kia looking to pick a site have been doing the rounds for a while, but an official with the Andhra Pradesh administration had said last year that the state was the frontrunner given its proximity to Tamil Nadu – home to plants of Kia’s affiliate, Hyundai.
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The Korean firms, jointly the world’s no. 5 car maker, are chasing new business after missing targets over the past two years. And now, there are worries sales to the United States, one of their biggest markets, could be affected by protectionist trade policies under President Donald Trump.
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India, however, remains a bright spot, with Hyundai – the country’s no. 2 automaker by sales – reporting growth there. Kia is hoping to leverage its affiliate’s supply chain network built over nearly two decades to gain a foothold in the market that is tipped to become the world’s third largest by 2020.
This month, Kia is likely to choose a site in the district of Ananthapur, Andhra Pradesh, for its factory, the source said, adding the state had offered about 600 acres of land to the automaker.