'Kia Motors chose Andhra due to Hyundai presence in TN'

The Tamil Nadu government on Thursday said that South Korea's Kia Motors decided not to locate its plant in the state as its sister company Hyundai Motor has already set up two plants near here.

In a statement issued here, the government said the Kia Motors chose not to set up industry in Tamil Nadu only due to their internal policy of not establishing a new unit in the same state where Hyundai was already functioning.

"Moreover, Hyundai Motors (major shareholder in Kia Motors) has announced additional investment in its existing unit at SIPCOT Irungattukottai Industrial Park to the tune of Rs 5,000 crore," the statement said.

The government's clarification comes after some allegations that the Kia Motors decided to invest in Andhra Pradesh due to bribe demands from ruling politicians.

The Tamil Nadu government quoted the letter written by Han-Woo Park, CEO and President Kia Motors: "...we very regretfully will not be able to consider the state of Tamil Nadu for Kia's potential greenfield project in India due to the business needs and requirements of our company and stakeholders, including, without limitation, geographical diversification, branding differentiation and diversification of supply channels and so forth.

"Under such business needs and requirements of our company and stakeholders, I hope you kindly understand that we have not established our overseas plants in the same states where the plants of Hyundai Motor Company are located (such as in the United States of America, China, Europe)."

According to the state government, French automobile company PSA Peugeot Citroen is currently planning to set up an integrated manufacturing facility in Kancheepuram district and Hosur by establishing three production facilities.

The initial investment envisaged in the three facilities will be about Rs 3,000 crore.

"This investment is further expected to increase to Rs 4,000 crore in the vehicle and powertrain projects. The proposed employment is around 1,500 persons," the statement said.

Other major industrial projects, like Hyundai Motor (Expansion), Yamaha Musical Instruments, Xuzhou Construction Machinery Manufacturing Company, Vedanta Ltd, ITC Ltd (Expansion), CEAT Tyres, Fruedenberg, Germany are proposing to invest around Rs 15,000 crore in Tamil Nadu, creating about 6,500 employment opportunities.

--IANS

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