Kia India plans $1.5 billion investment in Andhra Pradesh to expand manufacturing operations

Kia plans to invest an additional $1.5 billion (Rs 14,167 crore) in Andhra Pradesh for expanding its manufacturing operations as the South Korean automaker looks to scale up capacity and bolster its presence in one of the world’s fastest-growing automobile markets.

The proposed investment is expected to significantly enhance the company’s manufacturing footprint at its Anantapur facility, where it currently has an installed annual capacity of around 300,000 cars, said people familiar with the matter. The expansion, including the addition of a new production line, could take the plant’s potential capacity to around 500,000 units, giving the company greater flexibility to accommodate new models and different powertrain combinations, the people said.

Kia is expected to formally announce its expansion plan at the Andhra Pradesh Investor Summit next week in Visakhapatnam. Though the proposal has been kept under wraps, the people said a formal memorandum of understanding (MoU) may be signed at the summit.


“Kia India continues to see strong momentum across our portfolio— a clear reflection of the trust our customers continue to place in us,” the automaker said in a written response to ET’s queries. “We remain closely attuned to market response and evolving customer demand, and this continues to guide how we think about our portfolio and our plans. As a brand, we are committed to meeting customers wherever their powertrain needs are to take them — and our recent portfolio additions reflect exactly that.”

“We are actively expanding our range to ensure customers have the right choice across segments and technologies,” the company said, without sharing details of the proposed investment or the manufacturing expansion.

“As part of the Hyundai Motor Group’s commitment to India, Kia is aligned with the Group’s broader intent to expand manufacturing capacity to support future volume growth and strengthen India’s role as a global export platform,” it said.

Three South Korean automotive parts manufacturers have also signed MoUs with the Andhra Pradesh government, indicating that the entire automotive ecosystem is expanding to cater to Kia’s expansion plans.

The expansion plans come at a time when Kia is preparing an aggressive push in the Indian market, with a wider product portfolio and a strategy to tap demand across vehicle segments. The company plans to offer 10 models in India by 2030, including new SUVs, while expanding its presence across petrol, diesel, electric, strong hybrids and factory-fitted CNG vehicles.

Rather than betting on a single propulsion technology, Kia intends to adopt a multi-powertrain strategy to address India’s diverse mobility requirements. The broader portfolio is expected to include a mix of internal combustion engine vehicles, EVs and hybrids, alongside CNG-powered models.

Kia has set an ambitious target of selling around 410,000 vehicles in India by 2030 and increasing its market share to 7.6%.

Kia entered India in 2019 with the launch of the Seltos SUV, helping establish a presence in the highly competitive passenger vehicle market.

The proposed investment would also further consolidate Andhra Pradesh’s position as an emerging automotive manufacturing destination, with the state seeking to attract large investments in this sector.