Hyundai Close to Announcing US Plant Site

SEOUL Reuters reported today thah South Korea's largest automaker, Hyundai Motor Co said on Wednesday that it was close to announcing the site of its first U.S. plant, while dismissing a media report naming Ohio as a potential location.

Citing an unnamed Hyundai Motor source, the Naeway Economic Daily newspaper reported on Wednesday that the automaker would begin construction of the proposed $1 billion plant this spring, with Ohio at the top of the list of candidates.

The newspaper said Hyundai plans to start production at the plant in 2004, with annual output slated for 300,000 vehicles.

But the automaker said it was still studying the options and called the report speculative.

``Our chairman (Chung Mong-koo) has said that we plan to make an announcement soon,'' Hyundai Motor spokesman Park Sang-woo told Reuters.

``Other than that, we still don't have specific information, including a location and an investment figure,'' he said.

Hyundai Motor shares were up 0.7 percent at 28,700 won at 0610 GMT, while the broader stock market index was up 2.52 percent.

Hyundai said last year that it plans to decide during the first half of this year on a location for the plant.

Currently, Hyundai Motor President Kim Dong-jin is visiting the United States for the project and is expected to return later this month, the spokesman said.

Hyundai has said that it hopes the U.S. plant would alleviate trade pressure, considering the current imbalance in auto sales between the two nations.

On Tuesday, visiting Deputy U.S. Trade Representative Jon Huntsman said he had recommended that Seoul reduce taxes and tariffs on imported autos.

South Korea levies an eight percent tax on imported autos, down from the 50 percent level when Seoul opened its market to imported cars in 1987, but still high compared to a 2.5 percent rate in the United States.

Overall sales of imported cars stood at 7,747 vehicles last year, making up 0.7 percent of the domestic market, according to the Korea Automobile Importers and Distributors Association (KAIDA).

While Hyundai exported 600,000 vehicles to the United States last year, the world's largest automaker, General Motors Corp sold just 285 cars in South Korea over the same period, according to KAIDA.

Kim Noi-myung, president and CEO of affiliate Kia Motors Corp told Reuters in an interview last year that the U.S. plant would also roll out Kia vehicles.