South Korea's Kia Motors is discussing with the Indian state of Tamil Nadu ...
NEW DELHI - South Korea’s Kia Motors is discussing with the Indian state of Tamil Nadu the possibility of moving a $1.1 billion plant out of neighboring Andhra Pradesh only months after it fully opened, due to policy changes last year, sources close to the talks told Reuters.
However, Kia is now in talks with the nearby state of Tamil Nadu, home to many major auto parts suppliers, about potentially relocating the plant, a senior state government official and a second source familiar with the discussions said. “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.
Kia has been troubled by a new Andhra state law on local hiring and by the new state government wanting to review the incentives given out by the previous administration to encourage the company to set up the plant, the second source and a third person with knowledge of the discussions said. Kia was caught off guard in July after the new state government in Andhra mandated companies to reserve 75% of all jobs for locals from the state, making it much harder for the company to find suitable employees, two of the sources said.
The logo of Kia Motors is seen on a wheel of its Carnival car at the India Auto Expo 2020 in Greater Noida, India, February 5, 2020. REUTERS/Anushree Fadnavis
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