The Hyundai-Kia group plans to extend its dramatic growth pace in Europe by the end of the decade to more than 1.3 million annual sales, Automotive News Europe reported.

"We are targeting 800,000 sales a year by 2010," said Ho-Sung Song, sales director of Hyundai Motor Europe. At the IAA in Frankfurt, Kia Europe senior vice president Jean-Charles Lievens said his company expects to hit 500,000 sales a year by 2008.

Reaching 1.3 million annual European sales would put Hyundai-Kia at virtually the same level as several traditional European manufacturers such as Ford and Renault. Combined with the ambitious European goals of Toyota - an announced 1.5 million annual sales by 2010 and an internal 2015 goal of 2 million - the two Asian groups are planning to add more new sales than the market is expected to add. In short, the two groups plan to capture all European growth and some of their competitors' existing sales.

"The European industry's been rattled by the speed of the Korean advance in recent years," said John Lawson, automotive analyst at Citigroup in London.

"The low-end of the market has got more life than the Europeans bargained for."

Hyundai-Kia has rapidly grown in Europe - to a combined 595,000 sales in 2004 from 348,000 in 2002 - as an importer. Now they are preparing to become more of a European competitor with locally designed and built vehicles.

Kia will open a Slovak plant with up to 300,000-unit capacity in late 2006; Hyundai is picking a Czech site for a 300,000-capacity plant by 2008 or 2009 and plans to expand its Turkey plant.

The brands are opening new headquarters in Germany, Hyundai in 2006 and Kia in 2007 and each plans a new design facility in Germany.

Hyundai will increase the number of employees at its European design and engineering centre in Ruesselsheim, Germany, to 400 by 2007 from the present 110.

"Then we will be able to develop complete vehicles, including engines, here in Europe," said Hyundai's Song. He hints a major product offensive will start in 2007.