Hyundai Motor on Saturday opened a second plant in India to respond to growing competition and further consolidate the country's position as a global hub for small cars.

India already exports models such as Hyundai's Getz and Suzuki's Alto to global markets from its high volume car plants.

Hyundai itself hopes new models and new factories in other emerging markets such as China will help it boost sales worldwide by 20% this year, Reuters noted.

Accoring to the report, Hyundai, the second-largest car maker in India, said it is prepared to fight greater competition from Tata's ultra-cheap Nano car unveiled last month.

"We are not looking to compete with the Nano in terms of price, but we are keeping our options open," Hyundai Motor India president Ashok Jha told the news agency, referring to the Tata car priced at just over $US2,500 before taxes.

The proposed mini car would be a mass market model that meets all global standards, Jha told Reuters without elaborating.

The new factory in Sriperumbudur, near the southern city of Chennai, would double capacity to 600,000 units, second only to leader Maruti Suzuki India 's planned expansion to 1million units by 2010/11, the report said.

The plant, which is adjacent to the existing plant, would largely be dedicated to making the new i10 for local and export markets, Hyundai Motor chairman and chief executive Chung Mong-Koo said, adding: "Hyundai Motor India will play its role of a global manufacturing hub for all of Hyundai's small car models."

Hyundai has spent $1bn on the new plant. According to Reuters, Jha said a new 300,000-unit engine and transmission plant would be operational later this year.

Reuters noted that annual passenger vehicle sales in India are estimated to nearly double to 2m units by 2010 due to rising incomes and new model launches. Hyundai is aiming for a quarter of the market in 2008, up from just over 20% now.

Hyundai sold 327,160 vehicles in India in 2007, up 9% from the previous year. Sales of models such as the Santro and Getz hatchbacks rose 8% in the domestic market, while exports climbed 12%, the news agency added.

Hyundai reportedly said it aims to make 530,000 vehicles in 2008, is expanding its local dealer network to 300 from 230, and will export to 90 markets, up from 73, from the port city of Chennai.

Hyundai is also talking to Indian firms for a possible venture for commercial vehicles, Reuters noted.