South Korean automaker Kia is planning to invest approximately $2 billion in a new manufacturing facility in Andhra Pradesh, expanding its presence in India and increasing its annual production capacity to 630,000 vehicles. The announcement was made by Kia India Managing Director and CEO Gwanggu Lee at the 31st CII Partnership Summit in Visakhapatnam on November 12, 2026. The proposed investment is expected to create approximately 12,000 direct and indirect jobs while strengthening India’s position as an important manufacturing and export base for the company.
The new facility will add approximately 200,000 vehicles to Kia India’s existing annual production capacity of 430,000 units. The company plans to manufacture vehicles powered by internal combustion engines and electric motors at the proposed plant. The expansion comes as Kia targets annual domestic sales of 410,000 vehicles by 2030 and looks to introduce additional models to compete in India’s growing passenger vehicle market.
Kia Announces $2 Billion Investment in Andhra Pradesh
Kia India plans to invest approximately $2 billion, equivalent to around ₹17,700 crore, to establish an additional manufacturing facility in Andhra Pradesh.
The announcement was made by Gwanggu Lee during the CII Partnership Summit 2026, where the company outlined its long-term manufacturing ambitions in India.
The proposed investment will expand Kia’s existing manufacturing operations in the state and increase its ability to produce vehicles for domestic customers and international markets.
According to Reuters, the new facility will be spread across approximately 465 acres, including land allocated for supplier operations.
Production is expected to begin in early 2030, although the project will require further development and implementation before commercial manufacturing starts.
The expansion also reflects Kia’s confidence in India’s automotive market, where demand for passenger vehicles, SUVs and electric cars continues to attract investment from international manufacturers.
Production Capacity to Increase From 430,000 to 630,000 Units
One of the most significant outcomes of the proposed investment will be the increase in Kia India’s annual manufacturing capacity.
The company currently has production capacity of approximately 430,000 vehicles annually. The new facility is expected to contribute another 200,000 units.
| Manufacturing indicator | Capacity |
|---|---|
| Existing annual capacity | 430,000 vehicles |
| Additional capacity | 200,000 vehicles |
| Planned combined capacity | 630,000 vehicles |
| Proposed investment | $2 billion |
| Expected production start | Early 2030 |
The additional capacity will give Kia more flexibility to manufacture different models and powertrain configurations.
It will also help the company respond to changing demand in India and increase exports to international markets.
The expansion is particularly important as Kia prepares to introduce more vehicles across multiple price segments and propulsion technologies.
New Plant Will Manufacture Petrol, Diesel and Electric Vehicles
Kia’s proposed manufacturing facility is expected to support vehicles powered by internal combustion engines as well as electric motors.
This reflects the company’s multi-powertrain strategy for India.
Rather than concentrating exclusively on electric vehicles, Kia intends to offer customers different technologies based on their requirements, including conventional engines and electrified options.
The additional manufacturing capacity could support future SUVs, passenger vehicles and electric models.
Kia is also expanding its product portfolio as it prepares to introduce 10 models in India by 2030, according to earlier industry reporting.
The company is targeting a broader presence across petrol, diesel, electric, hybrid and CNG-powered vehicles.
This strategy is designed to address differences in consumer preferences, charging infrastructure and affordability across the Indian market.
Kia Targets 410,000 Annual Sales in India by 2030
The manufacturing expansion is closely connected to Kia’s sales ambitions.
The company is targeting annual domestic sales of approximately 410,000 vehicles by 2030.
It also wants to increase its market share in India to approximately 7.6%.
Kia has recorded strong demand for several of its existing models, including the Seltos and Sonet.
In October 2026, the company reported its highest-ever monthly sales since entering India, selling 33,462 vehicles, representing year-on-year growth of 13.22%.
Kia also said it had crossed one million cumulative vehicle sales in India within four years and was pursuing a target of reaching two million sales over seven years.
The additional manufacturing capacity could help the company support this growth without relying entirely on higher utilization of its existing facility.
However, reaching the 2030 sales target will depend on new product launches, pricing, competition and overall passenger vehicle demand.
Andhra Pradesh Becomes More Important to Kia’s Global Manufacturing Strategy
Kia began developing its Indian manufacturing operations in Andhra Pradesh after signing an agreement with the state government in 2017.
Its existing Anantapur facility began mass production in August 2019, with the Seltos among its first major products manufactured in India.
The plant has since become an important part of Kia’s domestic and export operations.
According to Reuters, the company has exported vehicles manufactured in India to international markets, using the country as a production base for overseas customers.
The proposed second facility will further strengthen this manufacturing ecosystem.
Kia also works with Indian and South Korean automotive component suppliers, creating opportunities for businesses involved in vehicle parts, electronics, manufacturing equipment and logistics.
The expansion could encourage additional supplier investment in the surrounding region.
Project Expected to Create 12,000 Jobs
Kia expects the proposed manufacturing expansion to generate approximately 12,000 direct and indirect jobs.
Direct employment opportunities could include manufacturing operations, engineering, quality control, maintenance and plant management.
Indirect employment could emerge through automotive suppliers, logistics companies, construction contractors and other supporting businesses.
The additional facility could also benefit local businesses by increasing demand for industrial services and automotive components.
For Andhra Pradesh, the project represents another major investment in its manufacturing sector.
The state has been attracting investments across automobiles, technology, data centres and energy.
Google’s planned $15 billion AI hub and Reliance Industries’ proposed $4.6 billion coal gasification project are among the other major developments announced around the same period.
Together, these projects highlight Andhra Pradesh’s efforts to attract large-scale industrial and technology investments.
Kia’s Expansion Comes Amid Growing Competition in India
India is one of the world’s largest passenger vehicle markets and has become increasingly important for international automakers.
Manufacturers are investing in additional production capacity to serve domestic demand and use India as an export destination.
Kia’s parent company, Hyundai Motor Group, has also announced a broader investment commitment of approximately $15.5 billion in India through 2032.
The group is investing in manufacturing capacity, research, technology and future mobility.
Other major automakers, including Maruti Suzuki, Toyota and Honda, are also expanding their Indian operations.
For Kia, the additional facility could improve its ability to compete with established manufacturers while supporting its expansion into electric and hybrid vehicles.
However, the company will need to maintain competitive pricing, improve its distribution network and introduce products that match changing customer preferences.
The Bigger Picture
Kia’s proposed $2 billion investment demonstrates the growing importance of India in the global automotive manufacturing industry. By increasing its capacity to 630,000 vehicles annually, the company is preparing for higher domestic demand while strengthening its export operations.
The investment also highlights Andhra Pradesh’s growing role as an industrial destination. The combination of automotive manufacturing, supplier development and infrastructure investment could create wider economic opportunities for the state. However, the success of the project will ultimately depend on production execution, demand growth and Kia’s ability to compete in an increasingly crowded automotive market.
Looking Ahead
The proposed facility is expected to begin production in early 2030, giving Kia several years to complete construction, establish supplier operations and prepare its manufacturing systems. The company will also need to align future vehicle launches with the additional capacity, particularly as it expands its electric, hybrid and conventional vehicle portfolios.
For India’s automotive industry, the investment represents another major commitment from an international manufacturer. If Kia achieves its 410,000-unit domestic sales target and successfully utilizes the expanded capacity, India could become an even more important production and export base for the South Korean automaker.
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