Kia Motors is on course to achieve a sales target of 1.34 million units for 2005, despite a tricky business environment, a senior executive told Reuters on Friday.

Hyundai Motor affiliate Kia faces a triple threat from an export-hampering rise in the won, high steel prices and a delayed local economic recovery, the report said.

Kim Yong-hwan, vice president in charge of Kia's international business also told the news agency the firm was seeking to bolster settlements in euros instead of the US dollars.

"We are confident that we will achieve our total global sales target thanks to a bright outlook for sales of the Sportage compact SUV and recently launched all-new Rio compact passenger car," Kim told Reuters.

Kia reportedly posted overseas sales of 73,788 units in March, up 36.7% from a year earlier and setting a new record for Kia's overseas monthly sales but local sales fell 5.7% against a backdrop of long-subdued home market and, clouding the prospect of fatter earnings this year, however, has been a 3 percent gain in the won against the dollar this year on top of a 15% heady rise last year.

Kim told Reuters the expansionary drive in Europe was not dictated solely by moves in the euro and customers there, combined with the vast Chinese market, remained a mouth-watering target.

"Since the European auto market is strategically vital to Kia's long term global growth, we plan to sustain sales volume in Europe even if the currency situation reverses," Kim reportedly said.

The report added that Kia may conduct a feasibility study for building a production base in areas such as Mexico or Texas in the United States, to meet its target of 2.5 million vehicle sales worldwide by 2010 for a global market share of around 3.5%.