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Korean automotive company Kia Motors, one of the few major manufacturers without India presence, is all set to zero in on Andhra Pradesh for its first plant.
While several States, including Tamil Nadu, where its parent company Hyundai has a major manufacturing base, and industrial State of Gujarat, have been wooing the company to locate its manufacturing base, AP has managed to pip others by presenting several locations on the AP-TN border and about 80-90 km from the existing Hyundai plant, sources close to the development explained.
Kia Motors recently indicated about its plans for overseas expansion, including India, without announcing any time-line or location of the plant.
According to Government sources, the company is likely to invest up to ₹5,000 crore, with ₹3,000 crore in phase one and manufacturing capacity of three lakh units.
The upcoming Chennai-Vizag Industrial Corridor and Krishnapatnam port add to the logistics advantage.
“Several sites were offered in Nellore, Chittoor and Anantapur. But the company representatives were keen for a location close to the TN border, Krishnapatnam port and the existing supplier base of Hyundai Motors in Tamil Nadu,” said a senior Government official on condition of anonymity.
The company had also been offered a site close to the Sri City Economic Zone, where the Japanese company Isuzu has set up a base and is in the process of creating an auto parts suppliers hub.
The recent Ease of Doing Business rating ranks AP as No. 1 in the country, and the expectation that some more sops may be offered as a part of the Central package for the residual State are weighing in its favour.
AP could have managed to become a base for the the German automotive company Volkswagen, but it preferred the established auto hub in Maharashtra.
AP's efforts to woo Malaysian automotive company Proton for its base in Vizag and Tata Motors for its Nano plant, did not materialise.
In recent reports on India plans, the company had stated that it was exploring new overseas manufacturing facilities, including in India.
A team entrusted with the task of finalising India plans is on the job, sources said.
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