Hyundai Motor Co. will hold meetings with St. Petersburg city authorities to discuss construction of a car plant, Interfax news agency cited a source as saying today.
The source familiar with Hyundai's plans told Interfax the talks will take place during the St. Petersburg Economic Forum this weekend. In 2006 Hyundai became the third most popular automotive brand in Russia, selling over 100,000 cars.
Over one half of Hyundai cars sold locally are already produced by the independent Taganrog car plant (TagAZ) in southern Russia under a license agreement.
Russia's car market is booming thanks to fast economic growth and consumers' increasingly easy access to credit. The country lures foreign automakers with tax breaks on assembly plants, while its largest carmaker, Avtovaz, is losing market share.
Sales of foreign car brands in Russia rose by 74 percent in the first quarter of 2007 to a record 295,469 units, according to the Association of European Businesses in the Russian Federation.
St. Petersburg, Russia's second-largest city, has been emerging as an important car industry hub, with analysts and officials alike calling it "a Russian Detroit," referring to the heart of the U.S. industry.
Earlier, Russian agencies reported that French carmaker PSA/Peugeot-Citroen and Japanese carmaker Suzuki Motor Corp. plan to sign agreements on building new car plants in St. Petersburg.
Deputy Economy Minister Kirill Androsov said this week Russia would sign 12 major business deals in St. Petersburg for a total of $3.3 billion.
Nissan Motor Co., Japan's second-largest carmaker, will start building a $200 million car plant in St. Petersburg on June 24 after signing a deal a year ago with the Economy Ministry.
Ford Motor Co. already has a plant near St. Petersburg, and Toyota Motor Corp. and General Motors are now building plants there.