The Hyundai car importer in the UK will soon become a 'factory shop' like the Kia operation.

Privately-owned Hyundai Car UK (HCUK) is in discussions with Hyundai Motor Europe (HME) about transferring the control of distribution of Hyundai vehicles in the UK to HME, with effect from the beginning of July.

This move follows on from the recent acquisition of HCUK's parent company, RAC plc, by Aviva plc and reflects HCUK's success in growing sales in the UK to around 1.5% market share.

In 2004, Hyundai achieved its best year ever in the UK with a 17% increase in sales year on year to 37,600 units in an otherwise flat market.

Under the direct ownership of HME, based in Frankfurt, Germany, Hyundai plans to further increase its sales in the UK to support its ambition to become a top five global automotive company by 2010.

HCUK managing director, David Walker, said: "During RAC plc's (formerly Lex Service plc) period of ownership, we have significantly grown the Hyundai business in the UK, and have laid a very firm foundation for its continuing growth and success in the future."

The move is expected to provide an even greater level of support and commitment from the world's seventh largest automotive manufacturer.

Existing owners' warranties will be unaffected and Hyundai will remain the only car maker in the UK to offer an unlimited mileage, fully transferable five year warranty across its entire range of vehicles.

The move will see renewed commitment to the ongoing development of the capability and performance of the UK dealer network.

Negotiations about the transfer of the business to HME are ongoing. However, it is expected that all the existing staff, based at the head office in High Wycombe and import centre at Tilbury docks east of London, will transfer to the new business, with the exception of Walker, sales director John Lawrence and HR and operations director Claire Balmforth.

HCUK has existed since 1994 but International Motors Group (IMG), currently the Daihatsu, Subaru and Isuzu distributor, first imported Hyundai cars into the UK in 1982.