Kia Motors to sign MOU with Andhra Pradesh to build manufacturing facility

Kia Motors to sign MOU with Andhra Pradesh to build manufacturing facility

Without its own production line, Kia could not enter the market due to steep tariffs on imported cars.

The Seoul-based Kia Motors Corporation today signed a Memorandum of Understanding (MoU) with Andhra Pradesh government for setting up a vehicle manufacturing plant in Anantapuramu district.

Kia Motors, a subsidiary of Hyundai Motor, is set to sign a memorandum of understanding with the Andhra Pradesh government on Thursday to build a manufacturing facility in the southern state, people in the know of the matter said.

"Apart from selling to customers in India, global auto makers are also looking at how to use India as base to design and source parts and now Kia is on that journey". The plant will have a capacity of approximately 3,00,000 cars annually. "The site will also be home to numerous supplier companies' facilities", said a company statement. As a result, the carmaker will differentiate itself from Hyundai in all major operational procedures - product, advertisement and dealership network.

The Kia Sportage is a popular crossover model in the global market.

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Founded in 1944, Kia Motors Corporation is Korea's oldest manufacturer of motor vehicles. "With economies in emerging economics such as Russian Federation and Africa in recovery, the company will tackle those markets with models fit for locals", said a company spokesperson.

Kia, which operates in over 160 countries and territories worldwide, said it plans to develop a new compact sedan and SUV specifically for the Indian market.

Hyundai's performance in the USA, its second-biggest market, also dropped 3 percent, outweighing growth in Western Europe and India.

The automaker together with affiliate Kia Motors reported on Wednesday a first-quarter net profit of $1.18 billion (1.33 trillion won), its 13th straight year-on-year quarterly fall.

The announcement came after Kia and Hyundai Motor Co suffered a March sales slump in China, their biggest market, attributed to a political standoff and rising competition from local brands.

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