AFP reports that Hyundai Motor is to build its second auto plant in India by mid-2007. Construction will start in April this year on a site next to Hyundai Motor India's existing plant at Chennai in the southern province of Tamil Nadu.

When completed in June 2007, the annual production capacity of Hyundai Motor India will therefore increase to 400,000 units from the current 250,000.

"We have decided to add a second plant to Hyundai Motor India to take advantage of the high growth potential of India," Hyundai Motor Chairman Chung Mong-Koo said in a company statement on his visit to Chennai.

"We need to expand production here to gain the upper hand in competition with our rivals in this market, which grows 12 percent every year," he said.

The demand for new cars in India stood at 800,000 last year, according to Hyundai Motor.

Hyundai Motor India will also serve as an outpost for exports to Europe, Latin America and the Middle East, he said.

Hyundai Motor is often cited as one of the South Korean company's most successful overseas operations, producing more than 500,000 vehicles in just five years, a record for India's auto industry.

Hyundai Motor sold 215,630 units in India last year, up 43 percent from the previous year, and aims to sell 250,000 vehicles this year.