Kia plans to invest about $2 billion to build a second vehicle manufacturing plant in Andhra Pradesh, managing director and chief executive Gwanggu Lee said on Thursday.

The investment will add 200,000 vehicles to the carmaker’s annual Indian output, taking total yearly production capacity to 630,000 units from 430,000.

Lee disclosed the expansion budget at the Confederation of Indian Industry’s Partnership Summit in Visakhapatnam. The project will generate approximately 12,000 jobs across assembly lines and component networks in the southern state. Kia did not publish a construction timetable or state when the first commercial models will leave the line.

Building out a second site gives the carmaker room to scale its domestic dealer inventory while protecting overseas shipments. The current Anantapur facility assembles the Seltos and Sonet sports utility vehicles, splitting output between regional buyers and export channels.

Car companies are pouring capital into India as domestic passenger vehicle purchases push the country deeper into its position as the world’s third-largest automotive market. Suzuki Motor, the majority shareholder in Maruti Suzuki, committed about $8 billion in 2025 to scale local operations. Rivals Toyota and Honda have also budgeted factory expansions to retain share against local champions and new market entrants.

For tier-one suppliers and parts distributors across southern India, the extra capacity locks in long-term tooling contracts and higher component volumes. The immediate execution risk sits in infrastructure delivery and supplier coordination, where rapid factory expansions regularly test local logistics networks and vendor balance sheets.

Kia entered Andhra Pradesh in 2017 through an initial investment agreement with the state government.

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