South Korea's Kia Motors Corp is expected to pick a site next month for its first factory in India, stepping up plans to start making cars in one of the world's fast-growing auto markets, two people familiar with the matter said.
The move would enable Kia to leverage the existing supplier base of its affiliate Hyundai Motor Co, India's second-biggest automaker by sales. The proposed factory would start production in 2019 and will eventually make 300,000 Kia vehicles a year - a major bet for a firm that sold 3.05 million vehicles last year.
The Korean pair, jointly the world's No.5 carmaker, are chasing new business after missing annual targets in 2015 for the first time since the 2008 global financial crisis. India is likely to become the world's third-largest car market by 2020, up from fifth place now, with annual sales nearly doubling to about 5 million vehicles from 2.7 million in 2015.
Kia is best known as a maker of relatively inexpensive cars, like the Rio sub-compact. Andhra Pradesh, Maharashtra and Gujarat have all been wooing Kia, although Tamil Nadu, home of Hyundai's existing plants near Chennai - is the frontrunner.
