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Hyundai eying Daewoo's Poland plant

LONDON - Hyundai Motor Co. is considering the purchase of Daewoo Motor Co. Ltd. plant in Poland, sources close to Daewoo and General Motors disclosed last week. The move would give Hyundai an important production base in Europe.

Daewoo spent $1.1 billion renovating the Warsaw factory after buying it from state-owned FSO in the early 1990s. The plant can build 400,000 cars annually, but only about 90,000 are expected to come off the line this year because of a sharp downturn in the Polish economy.

The Warsaw plant does not feature in GM's acquisition plans for Daewoo. Along with Fiat Auto S.p.A., GM is well represented in Poland with a plant at Gliwice that builds the Astra and Agila.

Hyundai Motor President Kim Dong Jin told Automotive News Europe in October that the company was studying the possibility of building a plant in Europe as sales in the region grow.

Combined sales of the Hyundai and Kia brands in Western Europe reached 320,000 units in 2000. Sales have declined this year, but a new Hyundai supermini due next year is expected to accelerate growth.

Using Daewoo's Warsaw plant would make sense for Hyundai. Obtaining the plant would solve Hyundai's problem of massive import duties in Poland, which make its cars unable to compete against rivals from Europe and Japan that produce there.

A Hyundai spokesman said the company is not looking at any European locations.

Said the spokesman: "In the short term we are concentrating on plans to build an assembly plant in the United States. In the longer term, European production is a possibility."

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