Hyundai Motor is developing an all-new model specifically for the European market, according to Automotive News Europe.

The car will go into production at the company's new 300,000-unit assembly plant to be built in either Slovakia or Poland. The Ford Focus-size model, somewhere between Hyundai's Accent and Elantra models, will be seen first at either the Geneva or Frankfurt motor shows in 2005.

Company insiders said the car is being developed in response to European distributors and dealers who say they could boost sales with one model rather than the current two in the mid-size segment. Sales of the Elantra struggle in many European markets.

The new car is being developed at Hyundai's new technical centre near Frankfurt and it will also form the platform for the company's re-entry into the World Rally Championship.

Hyundai will decide in February where it will build its €1.1 billion plant to produce small and mid-size cars starting in 2007. Three sites, two in Poland and one in Slovakia, are considered front-runners for the assembly plant.