Kia plant on AP soil all set to bring prosperity

South Korean auto major Kia Motors Corporation on Tuesday kicked off trial production at its $1.1 billion Greenfield car manufacturing plant near Erramanchi village in Penukonda area of the backward Anantapur district of Andhra Pradesh. For the 74-year-old, Seoul-based carmaker which already has 14 car plants around the world, setting up a new car plant is not a big task. But the uniqueness of this new plant being established on 536 acres is that the carmaker could complete entire construction of the plant within just 14 months. Even senior executives of the company admit that it’s a new record for Kia.

“I came to India for Auto Expo 2018 where we displayed our vehicles. But I never expected at that time that I would come back for trial production run so early,” Han-Woo Park, president and CEO, Kia Motors Corporation, said during the trial production ceremony.

If the trial production which will continue for a couple of months goes off well, Kia vehicle will start rolling off assembly line from September onwards, thereby putting Andhra Pradesh and Anantapur district on global automotive map.

Image and name apart, Andhra Pradesh will immensely benefit from the presence of Kia Motors on its soil, more so is the backward Anantapur district. As of now, Kia and its vendors from India as well as South Korea are collectively investing $2 billion (Rs 12,900 crore) in the project. While Kia invested $1.1 crore on the plant and associated infrastructure, the vendors are pumping in the remaining amount on ancillary units that are coming up in two vendor parks nearby.

The other key benefit for the Telugus is the number of jobs that the plant is expected to generate. Currently, Kia Motors India has employed over 1,300 people. By the time manufacturing operations start, the automaker will employ close to 3,000 people. These apart, vendors are estimated to generate 7,000 jobs, taking the total job count to 10,000. For a district haunted by continuous droughts and deficit rainfall, such large number of jobs is a real blessing. Therefore, the Kia plant is likely to transform the backward Anantapur district in not so distant future.

With Kia plant close to production stage now, the Andhra Pradesh government will try to capitalise on the automaker’s presence in the State and make efforts to attract more investments from automobile sector. Apart Kia, Japan’s Isuzu, Hero Motors, Apollo Tyres and Ashok Leyland have already invested in the State. But efforts of Andhra Pradesh to transform the State into automotive hub will bear fruits only if Kia succeeds in selling its models in India. The automaker will start its Indian automotive journey with an SUV based on SP Concept which was unveiled at last year’s Auto Expo.

As per indications from the company, the SUV is likely to be priced from Rs 9 lakh. For a new brand like Kia, it is going to be a tall order to succeed in premium segment. It would have been a lot easier for it, had it opted for a mass market model for its India foray. Nevertheless, let’s hope that Kia succeeds in India, thereby benefiting AP.