Hyundai to set up small truck plant in India

Hyundai Motor Co plans to set up a light commercial vehicle plant in India that will initially build one-tonne trucks. The plant will be located on 700 acres of land near Pune in Maharashtra, the paper said, citing sources close to the development. The company may also set up a powertrain facility to build engines and gearboxes, it said.

A spokeswoman for Hyundai Motor India declined comment.

Hyundai, the second-biggest car maker in India, has said before it was studying the Indian market for trucks and buses, which is dominated by Tata Motors Ltd. .

Ashok Leyland Ltd. and smaller rivals Eicher Motors and Mahindra & Mahindra Ltd. also compete.

The potential of India's rapidly expanding economy has also drawn foreign firms. Mahindra has a joint venture with Navistar International for truck and buses, while MAN AG has a deal with Force Motors Ltd.

Hyundai is setting up a second car plant in Chennai to double its capacity to 600,000 units by end-2007. It is also building an engine and transmission plant there with a capacity of at least 400,000 units.