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. Last Updated: 07/27/2016

Hyundai Considers Building $400M Car Plant

SEOUL, South Korea -- Hyundai Motor is considering building a car manufacturing plant in Russia for about $400 million to expand its presence in the country's booming auto market, a Hyundai official said Thursday.

The plant would have the capacity to produce 100,000 cars annually, and Hyundai is in the process of picking a final site for the facility, the official said, declining to be identified.

Hyundai, the world's No. 6 automaker along with its affiliate Kia Motors, sold 67,439 vehicles in Russia in the first seven months of the year, about 20 percent higher than 56,294 units a year ago, according to data from the Association of European Business in Russia.

Over half of Hyundai cars sold locally are already produced by the independent Taganrog car plant in southern Russia under a license agreement.

Sales of foreign car brands in Russia jumped 67 percent during the seven months to 861,736 units, according to the data.

The domestic car market is booming thanks to fast economic growth and consumers' increasingly easy access to credit. The country lures foreign automakers with tax breaks on assembly plants, while its largest carmaker, AvtoVAZ, is losing market share. The move also comes as Hyundai is expanding overseas units to cushion against the impact of a higher won currency and labor stoppages at home.