There has been a lot of talk on the imminent foray of KIA Motors into India and it is likely that KIA, which is part of the Hyundai Group may have picked Andhra Pradesh as the site for its first factory in the country.

A team of delegates from the AP government, which included Karthikeya Mishra - Industries Director, Solomon Arokia Raj - Industries Secy and Sai Prasad - Principal Secy to CM had met with KIA Motors executives in South Korea in January to finalise the contours of the deal and to sign a MOU, say sources to CNBC-TV18.

The plant is likely to come up in the district of Ananthapur, and two locations within this district, Gutturu and Hindupur city are possible site locations. Apart from AP, KIA had also considered Gujarat, Tamil Nadu, Maharashtra and Madhya Pradesh for its plant site.

KIA's plant would have an installed capacity of 300,000 units a year and is being set up through an investment of USD 1 billion as CNBC-TV18 had reported last week.

KIA would produce mass-markets sedans and SUVs in India which is poised to be the third largest car market by 2020. But this won't be easy as KIA would be competing with Marurti Suzuki, which owns half the mass market as well as its own sister concern Hyundai, which is at no 2.

However, to its advantage, KIA will be able to leverage Hyundai’s supply chain network and share platforms and powertrains with Hyundai to get a good head start.

KIA's product pipeline could include the KIA 'Sportage' SUV, the 'Rio' premium hatchback and 'Soul' hatchback all of which are popular globally.

However, a query by CNBC-TV18 to Hyundai India did not elicit a response.