Kia Motors says it will stay put in AP

Hyderabad: Describing a report that it is planning to shift its $1.1-billion car plant out of Andhra Pradesh, as false and baseless, South Korean automaker Kia Motors on Thursday asserted that it would stay put in Andhra Pradesh where its manufacturing unit 'is doing extremely well' Reuters, an international news agency, on Thursday ran a news story saying Kia Motors is in talks with Tamil Nadu on "the possibility of moving $1.1 billion plant out of Andhra Pradesh only months after it fully opened, due to policy changes last year".

Responding to Reuter's report, Manohar Bhat, Head (Sales & Marketing), Kia Motors India, told The Hans India: "The news report came as rude shock for us. It is shocking to see such a report when our plant in Andhra Pradesh is doing extremely well. It is the worst formation of imagination and concoction".

Terming the report as totally untrue, Bhat said: "We share very cordial relations with the Andhra Pradesh government. We have no problems and no concerns whatsoever. It is surprising to see an unnamed Kia Motors official being quoted in the story. It is a baseless report. We don't know who is behind the false news".

Last year, Kia inaugurated its Greenfield manufacturing facility near Penukonda in the backward district of Anantapur in Andhra Pradesh. The facility, established with an investment of over $1.1 billion and constructed in just two years, has a capacity to churn out three lakh units annually. It generated 12,000 direct and indirect jobs. Kia Seltos, Kia's first model in India and being made at the plant, is a blockbuster hit on sales front.

The Reuters' report, which quoted un unnamed Tamil Nadu government official and a source familiar with the discussions, claimed that Kia has been unnerved by the AP government's move to reserve 75 per cent jobs in private sector for locals, and review financial incentives offered to the South Korean automaker by the previous government.

Meanwhile, the Andhra Pradesh government also denied the report and said Kia Motors would not leave Andhra Pradesh. "Kia Motors is considering expansion in the Indian market and does not have any plan to shift the facility from the current location," AP Finance Minister State Buggana Rajendernath told a media conference in Amaravati on Thursday.

It is very damaging that such irresponsible reports are being circulated in the social media to mislead the people and there is an urgent need for a mechanism to prevent such a false propaganda, he added.

The Finance Minister further said that Andhra Pradesh attracted large number of investments after the YSRCP government assumed charge. "Unlike previous regime, the present government is not giving publicity on its efforts to promote industrial sector. We are just maintaining a low profile and doing our work. APIIC has allotted 1,057 acres to 1252 companies after the present government took over," he maintained.

From June to November 2019, 19 units were grounded with an investment of Rs 15,600 crore. Furthermore, eight more units with an investment of Rs 7,916 crore are ready for trial production runs, he added.

Dr Rajat Bhargava, Special Chief Secretary, Industries and Commerce Department, AP, in a statement, pointed out that the Andhra Pradesh government and Kia Motors have a strong partnership, with the automaker planning to increase its production at Anantapur plant from 2 lakh units to 3 lakh units per annum. The Andhra Pradesh government condemns the false report about Kia plant's shifting, he said.

"The Government of Andhra Pradesh enjoys a cordial relationship with our neighbouring State of Tamil Nadu. The Principal Secretary, Industries Department of Tamil Nadu, has conveyed that they are not in talks with Kia Motors and that there were no discussions between the two parties with regard to Kia plant in AP," he claimed.