Kia Motors Corp., South Korea's second-largest carmaker, said it is still in search of a place for its first plant in India, refusing to confirm a new report that the company would invest about 1.6 billion US dollars on the construction of plants in Penukonda in the southern state of Andhra Pradesh.
Kia, an affiliate of South Korea's leading Hyundai Motor group, has been in talks on building its factory in India, a fast-growing auto market, and India's Economic Times reported that the company had selected Penukonda for its first plant.
"We are still going over it to secure a competitive factory site," the company said in a brief regulatory filing. "The size of our investment has not yet been determined."
Kia is in the final stage of talks with India to build a plant capable of producing 300,000 units a year, an unnamed Hyundai official told Yonhap news agency, adding Penukonda is one possible site for the Indian plant which will take about one trillion won ($875 million).
Due to a 60 percent tariff on foreign vehicles, Kia badly needs to build its own plant in Indis where Hyundai operates two plants in Chennai, the capital of the Indian state of Tamil Nadu, with a combined capacity of 650,000 units, Yonhap said.
Lim Chang-won = firstname.lastname@example.org