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Hyundai Motor won't make mini cars in South Korea due to low profitability

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Hyundai Motor Co. said Wednesday it will not consider producing mini-cars in South Korea due to low profit margins, a company spokesman said.

``Sales of vehicles with one-liter engines and smaller in Korea do not make high profits,'' Hyundai Motor spokesman Jake Jang said, adding that Hyundai gave up producing mini-cars in South Korea in 2002.

Mini-car car models will continue to be produced in Hyundai Motor's Chennai plant in India, which has an annual capacity of 600,000 vehicles, he said.

In the small car category, which means engines between 1.3 liters and 2 liters, Hyundai manufactures two models in South Korea, the Avante and Verna, known abroad as the Accent, Jang said.

``Hyundai Motor will have to focus on mid-size vehicles in Korea where mid-size and large-size cars are usually preferred to mini cars,'' said Hahn Kum-hee, an analyst at Samsung Securities Co.

Despite high oil prices, domestic demand for mini-cars has remained flat, she said.

Hyundai Motor sold 240,953 vehicles in October, up 15 per cent from 209,047 vehicles a year ago. Strong sales of the Santa Fe and Veracruz SUVs in the United States and the i30 hatchback in Europe boosted the month's numbers.

Local sales rose 8.9 per cent from last year to 55,224 vehicles. Exports were up 17 per cent to 185,729 vehicles.

For the 10 months through October, the automaker sold 511,825 vehicles domestically _ up 9.6 per cent from the same period last year _ while exports rose 4.2 percent to 1,627,345 vehicles.

Hyundai Motor, which owns 38.6 per cent of Kia Motors Corp., is South Korea's biggest automaker.

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Hyundai Motor won't make mini cars in South Korea due to low profitability
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