Hyundai Motor said on Thursday that, together with seven suppliers, it would invest a total of $US1.4 billion in a new European production centre in Slovakia.

Hyundai Motor president Chung Mong Koo told Reuters Hyundai’s Kia Motors unit would itself spend more than $1.1 billion on the Slovak factory.

Previous estimates by Hyundai of its investment had ranged from €700 million to €1.1 billion, equivalent to $864 million to $1.36 billion, the report noted.

“A further seven partner firms are planning to invest,” the Hyundai chief told Reuters after inking the investment deal in Bratislava, adding: “These partner investors should invest $300 million.”

The plant, which will produce small- to mid-sized vehicles, will have production capacity of 300,000 units per year, he reportedly said, more than a previously reported 200,000, and construction of the factory should start in April.

Reuters said that when this project and a similar sized project being built by French carmaker PSA Peugeot come on line in 2006, the EU newcomer state of 5.4 million people will become the world’s largest producer of cars per capita.

A 280,000 car-per-year plant run by Volkswagen is currently the backbone of the country’s booming car industry, the report noted.

Hyundai’s president reportedly did not name all of the supplier firms, but said one was Hyundai Mobis, which said last week it would invest $160 million for a feeder factory.

According to Reuters, he also said his company would finance half of the factory’s construction with its own resources, but would look to European lenders for the remaining amount.

“We would be able to finance 50 percent (of the investment) from our own sources and we would take a loan for the other 50%,” he reportedly said, adding: “We would try to get the other 50% somewhere in Europe where there would be favourable interest conditions.”

Hyundai’s head said the company had no plans to invest in any other countries for now and added that a main reason the firm chose Slovakia, which beat out its larger northern neighbour Poland for the deal earlier this month, was the country’s low labour costs.