Kia Motors to finalise Andhra or Maharashtra for $1-bn investment

Signs of a KIA Motor car dealership are pictured in Monterrey, Mexico, August 23, 2016. REUTERS/Daniel Becerril

South Korea’s Kia Motors Corp is close to finalising a site for its first factory in the country, slated to attract $1 billion (Rs 6,700 crore) of investment. It had first identified three states and is now deciding between Andhra Pradesh and Maharashtra. The target for operationalising the factory is the end of 2018 or early 2019. A senior official from one of the two states said Andhra has an edge.

The official, who requested anonymity, said all the states were offering about the same financial incentives and other packages but the key factor for the company was ease of doing business. Andhra has top rank in this on the World Bank’s latest survey in this regard. The company has seen four locations in the Chittoor and Ananthapur districts in Andhra; in Maharashtra, places close to Aurangabad. Its requirement is 500-600 acres. Senior ministers and bureaucrats from both states have visited the company’s headquarters in Seoul.

Other factors which could help Andhra are its two industrial corridors and the resulting boost to getting the infrastructure ready and in car movement for the factory. The locations in question are also close to two ports. And, close to parent company Hyundai’s facility (in neighbouring Tamil Nadu).