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. Last Updated: 07/27/2016

Hyundai Plans to Build Auto Factory

MTA Hyundai on display at a Moscow show this year. The carmaker said its plant will produce 100,000 vehicles annually.
SEOUL, South Korea -- Hyundai Motor said Monday that it planned to build a factory in Russia, though key details including the location of the plant and size of the investment remain undecided.

Hyundai Motor chairman Chung Mong-koo disclosed the plan in a meeting with government officials in Moscow on Friday, Hyundai spokesman Ki Jin-ho said.

Chung said the factory would have an annual capacity of 100,000 vehicles, Ki said. Where the factory was to be built and how much it would cost were to be determined later, he said.

Demand for autos is growing fast in Russia and Hyundai needs to respond, Ki said.

"It's a natural approach for Hyundai to meet the demand there," said Nam Kyung Moon, an analyst at Meritz Securities in Seoul. The factory may cost about 500 billion won ($549 million), he added.

Hyundai currently has factories in China, India, Turkey and the United States, with another under construction in the Czech Republic.

The automaker produces vehicles in cooperation with a Russian partner by exporting kits for local assembly.

Ki said Hyundai was the biggest seller of foreign vehicles in Russia. In October, Hyundai sold 16,489 vehicles, an increase of 92 percent from the same period last year.

The automaker sold 100,685 vehicles in Russia last year, with about half the total consisting of vehicles assembled in the country.

Foreign vehicle sales grew 64 percent in Russia to 1.3 million units in the first 10 months of the year, according to the Association of European Business in Russia.

AP, Bloomberg