Published Nov 12, 2026 | 8:55 PM ⚊ Updated Nov 12, 2026 | 8:55 PM
The agreement was signed at the 31st CII Partnership Summit, which began in Visakhapatnam on Thursday.
Synopsis: Kia has signed an MoU with the Andhra Pradesh government to invest ₹18,811 crore, along with its supply partners, in a second car manufacturing plant at Erramanchi in Sri Sathya Sai district, creating 12,000 jobs and adding two lakh vehicles to its annual production capacity. Production is scheduled to begin by early 2030, taking Kia’s total annual manufacturing capacity in the State to 6.30 lakh vehicles.
South Korean automaker Kia has signed a Memorandum of Understanding (MoU) with the Andhra Pradesh government to invest ₹18,811 crore ($2 billion), along with its supply partners, to set up its second car manufacturing plant in Andhra Pradesh, adding two lakh vehicles to its annual production capacity and creating employment for 12,000 people.
The new plant will come up on 465 acres at Erramanchi in Sri Sathya Sai district, adjacent to Kia’s existing facility at Penukonda. Production is scheduled to begin by early 2030.
The agreement was signed at the 31st CII Partnership Summit, which began in Visakhapatnam on Thursday, 12 November. Chief Minister N Chandrababu Naidu, Kia India managing director and CEO Gwanggu Lee, and Kia Corporation senior vice-president Eui Chul Jung were present at the signing.
The second facility will have all major manufacturing divisions, including stamping, welding, painting and assembly. It will manufacture advanced models of both internal combustion engine (ICE) vehicles and electric vehicles (EVs).
The existing Penukonda plant has an annual production capacity of 4.30 lakh vehicles. With the second plant adding another two lakh vehicles, Kia’s total annual manufacturing capacity in Andhra Pradesh will rise to 6.30 lakh vehicles. The company’s combined investment across the two plants will reach $5 billion.
Kia already exports vehicles manufactured in Andhra Pradesh to more than 100 countries. The second plant will expand the State’s manufacturing and export capacity.
Naidu welcomed the investment and said he wanted to develop Andhra Pradesh into a leading centre for electric and hybrid vehicles and automobile components.
He proposed that Kia establish a Design Engineering Centre, a Global Capability Centre and a Battery Research and Development Centre in Andhra Pradesh. He also said IIT Tirupati was ready to partner with the company in battery research.
The Chief Minister announced that the State would introduce an escrow account system for disbursing incentives to investors and bring in an Investment Protection Act to safeguard investments.
He noted that he had earlier visited South Korea to bring Kia’s first plant to Andhra Pradesh and listed the infrastructure provided for the facility, including water supply from the Gollapalli reservoir, road connectivity and access to the airport.
In another development at the summit, the State government proposed a ‘Cocoa Mission’ in collaboration with Mondelez India.
Mondelez is expanding its chocolate manufacturing plant at Sri City with an investment of ₹1,800 crore. Once the expansion is completed, the plant’s production capacity will increase by 90 percent.
Naidu set a target of expanding cocoa cultivation by 10,000 hectares every year to achieve an annual production of 50,000 metric tonnes by 2040.
He advised Mondelez to source cocoa, milk, sugar and packaging materials from local farmers and DWCRA women’s groups. He also proposed a Cocoa Centre of Excellence and a research centre in Tirupati.
(Edited by Dese Gowda)
