Kia India Plans $2 Billion Andhra Pradesh Plant to Add 200,000 Cars

Kia plans to invest about $2 billion to build a second vehicle manufacturing plant in Andhra Pradesh, managing director and chief executive Gwanggu Lee said on Thursday.

The investment will add 200,000 vehicles to the carmaker’s annual Indian output, taking total yearly production capacity to 630,000 units from 430,000.

Expanding Southern Assembly

Lee disclosed the expansion budget at the Confederation of Indian Industry’s Partnership Summit in Visakhapatnam. The project will generate approximately 12,000 jobs across assembly lines and component networks in the southern state. Kia did not publish a construction timetable or state when the first commercial models will leave the line.

Building out a second site gives the carmaker room to scale its domestic dealer inventory while protecting overseas shipments. The current Anantapur facility assembles the Seltos and Sonet sports utility vehicles, splitting output between regional buyers and export channels.

Automakers Contest Indian Assembly

Car companies are pouring capital into India as domestic passenger vehicle purchases push the country deeper into its position as the world’s third-largest automotive market. Suzuki Motor, the majority shareholder in Maruti Suzuki, committed about $8 billion in 2025 to scale local operations. Rivals Toyota and Honda have also budgeted factory expansions to retain share against local champions and new market entrants.

For tier-one suppliers and parts distributors across southern India, the extra capacity locks in long-term tooling contracts and higher component volumes. The immediate execution risk sits in infrastructure delivery and supplier coordination, where rapid factory expansions regularly test local logistics networks and vendor balance sheets.

Building on the Anantapur Base

Kia entered Andhra Pradesh in 2017 through an initial investment agreement with the state government. Mass assembly at the existing Anantapur plant started in August 2019, giving the South Korean group its first manufacturing footprint on the subcontinent.

State authorities and automotive suppliers now await the formal ground-breaking date and environmental filings for the site, which will outline the exact production mix between domestic sport utility vehicles and export-bound models.