Hyundai Motor is meeting with local suppliers and government officials in Ostrava to discuss building an auto assembly plant near the Czech city.
Suppliers have confirmed meetings with Hyundai and government officials. Ostrava is located on the far eastern border with Poland.
Hyundai's list of possible central European plant sites includes Ostrava, said Veronika Jakubcova, a spokeswoman for Hyundai's Czech subsidiary. But Hyundai is looking at other sites in the Czech Republic, Slovakia and Hungary, she said.
The Czech government also is promoting a potential plant site near Zatec in the northwest.
In South Korea, Hyundai spokesman Oles Gadacz said a site decision is not imminent.
"Yes, we have undertaken feasibility studies on the site of our European plant but we simply are quite a while away from a final decision," he said. "At the moment, our Alabama [USA] plant remains our priority."
There are two potential sites for Hyundai near Ostrava: a 200-hectare site in Orlova Lutyne and 290-hectare site in Nosovice. The Czech government owns the property at Orlova Lutyne. It does not at Nosovice, although it has designated the site as a target for strategic investment.
"The land is not yet owned by a single entity. There is no infrastructure there," said Miroslav Kopecny, a spokesman for the regional government development office.
But Marie Obrockova of the Ostrava city hall development office, said: "There would be no problem with a land transfer."
Located outside Ostrava and 10km from the Polish border, the Orlova Lutyne site has logistics connections.
"That place has potential," said Obrockova. "It is right next to the future D-47 highway and it is 15 minutes from Ostrava by mass transit."
Transportation is a major problem in the region, said Zbynek Keisler, chairman and commercial director of Tatra, a heavy-truck manufacturer in nearby Koprivnice. But construction of the D-47 highway is scheduled to start this year and be completed in 2008, improving connections south to Vienna, Austria, and north to Katowice, Poland, he said.
The Ostrava region's economy is based on heavy industry and coal mining. A slump over the past decade raised regional unemployment to 15 percent - half again above the national level. But industry is still almost 30 percent of the region's gross domestic product and the auto industry has a long local history.
"The first car in middle Europe was built here," said Keisler.
Local suppliers include Autopal, Brano group, Cirex, Dura, Hayes-Lemmerz, Siemens and Tatra.
If Hyundai doesn't want either Ostrava site, the Czech government has a second option in the far northwest: the 360-hectare area near Zatec.
PSA once considered the former air base along with sites in Hungary and Poland before selecting Revoz in western Slovakia.
The Czech government has decided not to subdivide the site but keep it as a single unit, said Jan Jirotka of CzechInvest. Suppliers nearby include Aisan Bitron, Johnson Controls, Koito Czech, Takada, Tokai Rika and Toyoda Gosei.
The Czech government and European Union regional support programs have targeted both Ost-rava and Zatec with special incentives for investment and job creation.
Hyundai sales in the Czech Republic are small but growing. Last year, sales doubled to 3,055 units for a 2.1 percent market share. Hyundai directly controls distribution since buying out independent importer Motokov in 2002.
The Czech Republic already has two other major automakers. A Toyota and PSA/Peugeot-Citroen joint-venture plant in Kolin will open in 2005 and produce about 300,000 vehicles a year. Volkswagen group's Skoda unit produced 440,572 cars in three Czech plants in 2002 and sold 73,833 locally - accounting for half of the Czech new-car market.