HYUNDAI could become the next major far eastern manufacturer to build a UK factory, in a move which would dramatically increase its fleet presence. The South Korean conglomerate's chairman Chung Mong-Gyu is reported to have said he was looking to build a European factory around the year 2000 - and he currently favoured the UK as a base. The plant could produce around 100,000 Escort-sized cars a year.

Hyundai UK said Mong-Gyu was giving hypothetical answers to hypothetical questions from British journalists but refused to rule out the prospect of a UK plant in the longer term. The development would signal a significant step up in activity for the notably aggressive South Korean manufacturers. Daewoo and Kia are already expanding in Europe, and newcomer Samsung is expected to launch here within the next three years.

Hyundai's UK operation is owned and run by Lex Service, which also has a substantial franchised dealer network and a 70,000-strong leasing fleet. If Hyundai expands rapidly in the UK, it is likely the distributorship would eventually pass into Korean hands.