SEOUL - Hyundai Motor will delay choosing a site for a new European plant until after mid-March while its chairman visits candidate countries Slovakia and Poland, a source close to the deal said on Thursday.
Hyundai Motors, South Korea's biggest car firm, had planned to announce the winning candidate for the 1.1 billion euro ($1.40 billion) facility around the end of this month.
"It's crucial to ascertain how seriously determined each candidate country is to give full support for Hyundai's plan," the source said by telephone.
"The chairman will also look around consumer markets there, visit local parts suppliers and see how the infrastructures, including railways, are set up," he said, referring to a trip Chairman Chung Mong-koo will take in mid-March.
Officials from Hyundai Motor and affiliate Kia Motors Corp., who returned home last week after wrapping up talks with governments of the two countries, are examining proposals.
The nations --- both due to join the European Union in May -- are the only two left in the running for the factory, which would significantly boost its host country's economy.
For now, Slovakia has an edge in cost terms, but it has a small population and there was a risk costs could rise as major global businesses make a foray into the former Soviet-style economy, company officials and other sources have said.
"Hyundai is weighing not just questions of incentives and localization, where the two countries' offers look quite similar, but also elements of long-term strategy," Andrzej Szejna, deputy head of Poland's investment agency, told Reuters.
"The company is looking at conditions including potential for economic growth, stability of labor costs and the tax system and the size of the domestic market -- which will still matter even in the EU single market," Szejna added.
Hyundai Motor President Park Hwang-ho told analysts last week the company was considering an initial investment of 700 million euros in its proposed European plant.
Construction of the plant, which would eventually have capacity to produce 300,000 units per year, is expected to start in the first half of this year with completion due in the second half of 2006. It would start operations in 2007.
Speculation has been rife in Slovakia's financial markets that Hyundai has tentatively chosen the country, sending the crown currency higher in anticipation of the hefty foreign investment.