"The group's subsidiary, Kia Motors, will announce its decision here today," a Kia spokesman told AFP. South Korean newspapers said Slovakia was ahead in the race, having offered more favorable terms. The new plant reflects Hyundai's push to establish a global production base as Europe emerges as a core market for South Korean auto firms, which have up to recently focused on the United States. Hyundai, the world's seventh largest auto company, plans to increase its exports to Europe this year by 22 percent. Last year, some 60 percent of its total exports went to the United States and 25 percent to Europe. With construction set to begin in 2005, the South Korean auto group plans to produce 300,000 cars annually when the new plant comes on stream in 2007. Hyundai's operations in central Europe will become part of its West European subsidiary, with the new factory supplying cars to both eastern and western European countries. The South Korean auto group is at the same time under pressure to revamp domestic assembly plants due to a steady decline in domestic sales, rising raw material prices and a stronger won. Hyundai Motor reported record earnings for last year, selling 1.65 million vehicles. Exports rose 8.9 percent to 1.01 million units due to brisk demand for higher-margin vehicles but domestic sales plunged 19.6 percent to 635,269 units. Hyundai hopes to sell 1.76 million vehicles this year, including 1.05 million abroad. Hyundai's success was in part due to a weaker local currency that made South Korean products cheaper abroad. The won, however, has been rising against the dollar recently. US-German group DaimlerChrysler holds a 10.5 percent stake in Hyundai Motor, which along with Kia controls more than 70 percent of South Korea's auto market. PIN/AFP