Hyundai denies SUV talks with DaimlerChrysler

SEOUL, Feb 18 Reuters reported yesterday that South Korea's top automaker Hyundai Motor Co on Monday denied a media report it was in talks with U.S.-German auto giant DaimlerChrysler AG to jointly produce an engine for sports utility vehicles.

The newspaper Korea Economic Daily quoted an annamed Hyundai official as saying the two firms were in negotiations to build a joint venture plant in the United States to make engines for sports utility vehicles (SUVs).

The talks would take concrete shape after Hyundai selected a site for its first vehicle assembly plant in the United States next month, the newspaper said.

But Park Sang-woo, a Hyundai spokesman, told Reuters: ``The speculation is totally groundless. We are not in talks with DaimlerChrysler over the issue.''

Hyundai shares were up two percent at 35,550 won at 0120 GMT, while the broader stock market index was up 0.98 percent.

DaimlerChrysler, which owns a 10 percent stake in Hyundai, formed a diesel engine joint venture in South Korea last year.

``It is also not certain if we will complete the selection of the site next month. It could be earlier or later than that,'' said the Hyundai spokesman.

In January, Hyundai officials in January toured Ohio and other U.S. states, looking for a site for the $1 billion plant.

Local newspapers have said Hyundai plans to start production in 2004, with annual output set to be around 300,000 vehicles.

The Korean automaker has steadily increased its U.S. market share over the past few years by offering low-priced alternatives to U.S. rivals and lengthy warranties.

Hyundai is aiming to increase its U.S. sales to 370,000 vehicles this year from 346,000 last year, which could put it ahead of the Volkswagen brand for the first time.

Last week, Hyundai said DaimlerChrysler was expected to go ahead with an earlier plan to launch a commercial truck joint venture by the end of this year.