Companies

Kia Motors not to invest in Tamil Nadu due to internal policy

Our Bureau Chennai | Updated on January 11, 2018 Published on May 12, 2017

The logo of Kia Motors. File Photo   -  Reuters

The Hyundai Motors’ sister concern issued clarification following reports that it chose to invest elsewhere because of corruption issues.

KIA Motors chose not to invest in Tamil Nadu purely due to an internal policy of not establishing its factories where its sister concern Hyundai Motors has a production facility, clarified the Tamil Nadu government quoting a communication from KIA Motors.

The state continues to be an attractive investment destination, it said pointing out that the French automobile company PSA Peugeot Citroen plans to invest ₹ 3,000 crore in Tamil Nadu to set up three manufacturing facilities for vehicles and power trains. The investment will be expanded to ₹ 4,000 crore in stages, the government said in the statement.

Refuting reports that KIA Motors chose to invest elsewhere because of corruption issues, the official statement quoted KIA Motors CEO Han Woo Park’s communication to the government in September 1, 2016, that “we have not established our overseas plants in the same States where the plants of Hyundai Motor are located (such as in the US, China, Europe)”.

Though KIA Motors is a sister company of Hyundai Motors it operates completely independently and it has its own requirements and business needs including geographical diversification, branding differentiation and supply channels.

KIA Motors’ communication was in response to Tamil Nadu reaching out to them to invest here when it heard that the Korean company was keen on investing in India.

Ford Motors

The State government also said that the American car company Ford has invested ₹ 1,300 crore in a global technology and business research centre at Sholinganallur, Kanchipuram. ELCOT has allotted 28 acres for the project which will generate 12,000 jobs. Ford has invested ₹ 4,500 crore in a 2 lakh a year car production facility and a 2.5 lakh engine production facility in Tamil Nadu.

But after it expanded in Gujarat there had been talk that major investors were investing outside Tamil Nadu.

However, the car company had earlier clarified that it had set up a second facility in Gujarat for logistics advantage. More than half its market for cars in the North and West, it had explained, said the official statement.

PSA Peugeot Citroen

The French automobile company is establishing three facilities in Kanchipuram and Hosur which will generate 1500 jobs.

Other major industrial projects include Hyundai (expansion), Yamaha Musical Instruments, Xuzhou Construction Machinery, Vedanta Ltd, ITC Ltd (Expansion), CEAT Tyres, and Fruedenberg, Germany all of which will invest of ₹ 15,000 crore and generate over 6,500 jobs.

These indicate that Tamil Nadu continues to be a favourite destination for manufacturing sector and investors, the government said in the statement.

Published on May 12, 2017
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