Kia Motors is discussing with Tamil Nadu the possibility of moving a $1.1 billion plant out of neighboring Andhra Pradesh, Reuters quoted sources as saying. South Korea's Kia Motors inaugurated the Andhra plant, its first in the world's fifth-largest car market, in December.
The Andhra plant has an annual capacity of some 3,00,000 units and created 12,000 direct and indirect jobs.
"(Kia) are facing problems (in Andhra Pradesh), they have been in preliminary negotiations with us ... There is a secretary-level meeting next week, we might have more clarity then," an official told Reuters on Wednesday.
In a statement, Kia said it has a long-term commitment to the Indian market and it aims to utilize the full capacity of its Andhra plant "before considering further expansion".
"We do not have any plans to shift the manufacturing facility from the current location," it said, without commenting on any policy concerns or talks with Tamil Nadu, which are at an early stage.
