Kia India plans to invest $1.5 bn to expand its manufacturing operations in Andhra Pradesh, with a new production line proposed at its Anantapur facility. The investment would increase the plant’s potential annual capacity from around 300,000 vehicles to approximately 500,000 vehicles and give the automaker greater flexibility to produce new models and powertrain combinations.

A formal announcement and memorandum of understanding are expected at the Andhra Pradesh Investment Summit in Visakhapatnam next week. The proposed expansion follows reported sales growth for Kia India, including overall growth of 30 per cent and a 41 per cent increase in September, although details on the project’s timeline and implementation phases have not yet been disclosed.

The investment would also reinforce the supplier network around the Anantapur plant. Three South Korean automotive component manufacturers, Hwashin, Seoyon and Iwamet, have committed a combined Rs. 16.14 bn to establish facilities in the region, with their investments expected to create more than 1,400 positions.

The presence of nearby suppliers could help Kia India reduce logistics costs and streamline its supply chain by bringing component production closer to the main manufacturing facility. The developing automotive cluster is also aligned with Andhra Pradesh’s efforts to attract industrial investment and expand local manufacturing capabilities.

Kia India has indicated that the planned expansion is intended to support rising demand for its vehicles in India and respond to changing customer requirements. The company’s Anantapur operations would consequently have additional capacity to accommodate future production requirements, while the investment summit is expected to provide greater clarity on the proposed project and its rollout.