Hyundai Starts to Build St. Pete Plant

ST. PETERSBURG -- Hyundai Motor, South Korea's largest automaker, said Thursday that it began building a 330 million euro ($510 million) factory in St. Petersburg in a bid to become the top car producer in Europe's fastest-growing major market.

The plant in the city's Kamenka industrial zone will produce 100,000 small and mid-sized cars annually by the end of 2011 after opening in January of that year, the company said in a statement. Other models may be added after 2011.

Hyundai joins five other foreign carmakers with plants under construction or operating in or near St. Petersburg. Spending on cars in Russia climbed 67 percent to a record $53.4 billion last year, Pricewaterhouse-Coopers said in February.

"The plant will produce an entirely new model," Hyundai vice president Ahn Joo-soo said at a ceremony near St. Petersburg on Thursday.

"The vehicles will be directed primarily to the Russian market, but we may eventually develop enough capacity for export."

Hyundai did not disclose the name of the new vehicle or its estimated cost. The company will continue production at the Tagaz car plant in Taganrog, in the Rostov region, even when the St. Petersburg plant starts work, Ahn said.

The carmaker's sales in the country rose to 147,843 cars in 2007, 47 percent more than the previous year. Russia is the sixth overseas country in which Hyundai will have a factory.

The company said it aimed to lift passenger vehicle sales 35 percent to 200,000 this year. Hyundai also plans to more than double sales of buses and trucks in Russia to 16,700, from 8,014 in 2007.