Hyundai Motor plans to invest INR70bn (US$981m) in new vehicle production capacity in the Indian state of Tamil Nadu, according to reports citing local government officials.

The reports suggest the Tamil Nadu Government's Cabinet of Ministers last week approved Hyundai's planned investment in a new manufacturing plant in Sriperumbudur near Chennai, the site of the South Korean automaker's existing manufacturing facilities in India.

The investment will create an initial 1,500 direct jobs at the new facility, which is scheduled to become operational in 2021.

The sources also suggested the Tamil Nadu government also approved "an exclusive package of incentives" for the production of electric vehicles at Hyundai's new plant.

Hyundai and Tamil Nadu government are expected to sign a memorandum of understanding (MOU) at the Tamil Nadu Global Investors conference this week.

Hyundai is one of the largest vehicle brands in India, with local sales amounting to 550,000 vehicles last year and a further 160,000 units were exported.

Suzuki Motor has also announced tentative plans to produce electric vehicles in India from 2020 and will begin local trials of these vehicles later this year.