South Korea's Hyundai Motor has announced that it plans to build a second plant in India to meet the country's growing demand for cars.
The new plant will enable Hyundai to produce 400,000 cars a year
The company didn't give details of its investment but it said the new plant would produce 150,000 cars a year.
This will boost the annual production capacity of the company - India's second-largest car manufacturer - to 400,000 units.
Hyundai expects its sales in India to grow 16% to 250,000 in 2005.
By 2010, it expects to nearly double sales to 400,000 cars.
The new plant will be built close to the existing one in Chennai, in the southern province of Tamil Nadu.
South Korea's top car maker estimates that the Indian market will grow 15% this year, to 920,000 vehicles, reaching 1.6 million vehicles by 2010.
Poor public transport boosts demand for cars in India
Demand in India has been driven by the poor state of public transport and the very low level of car ownership, analysts said.
Figures show that currently only eight people per thousand are car owners.
"We desperately need to expand our production in order to meet growing demand in the Indian auto market, which is growing over 12 percent every year, and to top our competitors," chairman Chung Mong-koo said in the statement.
He said the company plans to use India as a base for exports to Europe, Latin America and the Middle East.
The company - which controls half of the South Korean's market - aims to become a global top five auto maker by 2010.