By Cheon Jong-woo
SEOUL (Reuters) - Hyundai Motor Co <005380.KS>, South Korea's top automaker, is considering making a small car in the United States as the financial crisis has lifted demand for such models, officials at the company and a car parts maker said on Sunday.
A company president said earlier Hyundai was unlikely to meet its U.S. sales target for this year as the credit crunch hit demand in the world's top auto market.
Currently, Hyundai, the world's fifth-biggest auto maker along with its affiliate Kia Motors Corp <000270.KS>, produces the Elantra, its top selling model, only in South Korea and Hyundai would need to talk with its unionized workers to decide to make the car abroad.
"Hyundai is considering producing the next model of the Elantra in the U.S. and we are preparing to supply parts for the car there," an official at a foreign car parts maker told Reuters by telephone, asking not to be identified.
The consideration comes as more customers are looking for smaller cars.
"A recent economic slowdown caused a big jump in even U.S. small car sales and we are looking for the trend," Choi Jae-kook, a president of Hyundai's international sales, said late on Friday.
J.D. Power and Associates said earlier this month worldwide car makers might experience an "outright collapse" in 2009 amid growing concerns about the availability of credit and general economic stress.
A Hyundai spokesman said the company had not decided anything on U.S. production plans.
"We consider various ways to manage U.S. factories efficiently and to meet rising small car demand there but nothing has been decided yet," he said.
BUMPY ROAD IN THE U.S.
Hyundai's aim has been to sell over 500,000 vehicles in the United States this year, compared with 467,009 in 2008.
But the recent financial turmoil and a economic slowdown in the world's top car market made it difficult for the company to meet the target, Choi said.
"We will face difficulties in developed markets such as the U.S. and Europe. As all of you know, (the) credit crisis is much bigger than expected with a U.S. $700 billion bailout and worldwide rate cuts failing to help financial markets," Choi told reporters after unveiling the Genesis Coupe, Hyundai's first rear-wheel drive sports car.
Choi declined to provide a new sales target.
Hyundai sold 337,664 vehicles in the United States during the first nine months of 2008, 5.8 percent less than a year ago.
Earlier this month, Hyundai's vice president for Europe told Reuters the company expected its European sales to be flat at best this year as the overall market tumbles, slashing its forecast from the 18 percent growth projected at the beginning of the year.
Still, Choi was optimistic about Hyundai's overall overseas sales saying it is competitive in the market for small and medium-sized sedans.
Stronger demand in emerging markets is also expected to help offset sluggish sales in developed countries and the company will go ahead with investment plans in Russia and Brazil, he added.
Hyundai plans to build a $600 million car factory in Brazil and started setting up a plant in Russia with investment of 330 million euros ($402 million).
"For now, Russia and Brazil are likely to be the fastest growing markets ... so we will go ahead with the original investment plans," he said.
On Friday shares in Hyundai ended down 4.06 percent at 68,600 won, compared with a 4.13 percent drop in the wider market <.KS11>.
(Editing by Greg Mahlich)
