Kia Evaluating Plan To See If It Needs To Switch To Sourcing Chips From India

Kia India is one of the largest car manufacturers in India, and the company has managed to stay in the top 5 list with just three products in its stable. Now, Kia is gearing up to launch its fourth model, the Kia Carens MPV, and is thus planning to expand both its production and sales network in India by 2022. However, one of the biggest challenges that the company faces right now, like every other manufacturer, is supply constraints, mainly due to the global shortage of semiconductor chips. While currently, Kia is sourcing its chips from across the world, it is weighing the possibility of switching to sourcing chips locally from India in the future.

Also Read: Kia Carens Three-Row MPV Makes Global Debut In India

The information was shared with carandbike by Tae-Jin Park, Managing Director, and CEO, Kia India, on the sidelines of the Carens' global debut. When asked if Kia might be considering looking for a new set of suppliers, possibly even from India, Park said, "I think there are some current (supply) issues, and the government also strongly looks at those kinds of demands for the whole of the OEMs in India. So, we are also thinking about it. But we haven't fixed it yet, the local supply issues. But anyway, globally we are thinking to increase the supply to India and that is why we can say that when we have some increase in production capacity, we can get those kinds of supplies globally."

Also Read: Kia Carens MPV India Launch In Q1 2022

The new Kia Carens will be launched in India in the first quarter of 2022, possibly in the month of February

Also Read: India Approves $10 Billion Plan To Lure Semiconductor And Display Makers

While this is certainly not something that could happen in the immediate future, the fact that the company is considering the possibility is worth noting, mainly because right now, there's barely any chip production that happens in India. Having said that, a lot of companies are planning to make semiconductors in India and the Tata Group is one among them. In fact, the home-grown company is planning to invest up to $300 million to set up a semiconductor assembly and test unit in India. Reportedly, the factory is expected to start operations by late 2022.

Also Read: India's Tata In Talks To Set Up $300 Million Semiconductor Assembly Unit: Report

Furthermore, India recently approved a $10 billion incentive plan to attract semiconductor fabricators and display manufacturers. Additionally, New Delhi has also approved a design linked incentive (DLI) plan to encourage 100 local companies in semiconductor design for integrated circuits and chipsets.

The new Kia Carens will be launched in India in the first quarter of 2022, possibly in the month of February. So, right now, Kia India is gearing up to ramp up production, and the company has said that the third shift will begin soon.