Kia Motors is considering local production jointly with Hyundai Motor in St. Petersburg, Russian business daily Vedomosti reported, citing a source close to Kia Motor's management and other sources in the automobile industry.

Hyundai Motor, which holds a 38.67% stake in Kia Motors, plans to open a $US400m plant with an initial capacity of 100,000 cars per year in St. Petersburg by the end of 2010, Prime-Tass noted.

Representatives of Kia Motors and Hyundai Motor in Russia declined to comment, Vedomosti said.

Hyundai Motor signed an industrial assembly agreement last year with the Russian Economic Development and Trade Ministry for the production of Hyundai models only, an official from the ministry told Vedomosti. The company could sign an additional agreement on the production of Kia models, the official said. Hyundai has not contacted the ministry to discuss such an agreement, the official added.

Kia cars are currently assembled at the IzhAvto plant, based in the city of Izhevsk in the constituent republic of Udmurtia, and by Avtotor, based in Kaliningrad. IzhAvto produces the Kia Spectra, Rio and Sorento models, and Avtotor produces the Ceed, Prime-Tass said.