Hyundai has signed a £199m deal to build a car plant in north west Russia, with construction due to start in the first half of 2008, the BBC reports.

The carmaker sold 130,166 cars in Russia between January and November, giving it a 9.1% market share.

Annual production capacity for the new plant, its sixth overseas factory, will be 100,000 vehicles.

Hyundai already assembles 70,000 to 80,000 cars under license at a plant in Taganrog, south Russia.

It also has factories in the US, China, India and Turkey, another is being built in the Czech Republic.