Following allegations that the Tamil Nadu government did not give proper assistance to Kia Motors, due to which they shifted their business to Andhra Pradesh, the state government on Thursday clarified that the company was not setting up their plant in Tamil Nadu due to their own internal policy. The policy states that they cannot function in the same state where there is a Hyundai unit functioning.
Hyundai is one of the major shareholders in Kia Motors. However, “Hyundai Motor has announced additional investment in its existing unit at SIPCOT Irungattukkottai Industrial Park,” a press release from the government also added.
The state government said that Han-Woo Park, CEO and president, Kia Motors had conveyed that they do not establish overseas plant in the same states where the plants of Hyundai Motor Company are located.
Speculations started after a Facebook post recently alleged that there were corrupt practices in land allotment by Tamil Nadu government, because of which Kia Motors was shifting to Andhra Pradesh. The government has claimed that the allegations made in the Facebook post were false and that they had provided full support to Kia Motors.
“It is reiterated that 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 is functioning. Moreover, Hyundai Motors (major shareholder in KIA Motors) has announced additional investment in its existing unit at SIPCOT Irungattukkottai Industrial Park to the tune of Rs.5,000 crores. This is a testimony to the fact that the Government of Tamil Nadu has been extending complete cooperation and striving to provide best investment opportunity to all Industries,” the government said.
Also responding to the speculation on why Ford Motor Company also decided to invest outside Tamil Nadu, the state government said that the company had informed late Chief Minister J Jayalalithaa that the main reason for establishing their greenfield project in Gujarat was to provide better logistics solutions and service delivery mechanism at a reduced transaction time and cost.
The state government also denied that they were not getting any new projects, pointing out that a company from France was planning to set up an integrated manufacturing facility in Kancheepuram by setting up three production facilities. The initial investment will be about Rs 3,000 crore and could go up to Rs 4,000 crore in the vehicle and powertrain projects. Projects like Hyundai, Yamaha Musical Instruments, Xuzhou Construction Machinery, Vedanta, ITC, CEAT Tyres and Freudenberg are planning to invest Rs. 15,000 crore in Tamil Nadu and create employment opportunities for around 6,500 people, the government said.