Samsung, the giant South Korean organisation, is to enter car manufacturing and intends to open plants in Europe by the turn of the millennium.
The company, the 14th largest in the world according to Fortune magazine, announced yesterday that it plans to make 500,000 cars a year at a plant being built in South Korea.
A European headquarters for the new Samsung Motors has been set up in Frankfurt in order to control import activity and also to start looking for suitable sites for manufacturing operations.
A spokeswoman said yesterday that the UK would be considered for a production plant. However, analysts said that a site in low-cost Eastern Europe seemed more likely.
Samsung hopes it can follow the success of its South Korean rivals Hyundai, Kia, and also Daewoo, which last launched its cars in the UK and Europe.
Samsung, whose interests stretch from electronics to chemicals and financial services, said it had allocated $13bn (pounds 8.6bn) to invest in car facilities by the year 2010.
The company last year announced a pounds 450m investment in an electronics plant on Teesside. Samsung also makes cement mixers and dump trucks at a site in Harrogate.
Kyung-choon Im, chief executive of Samsung Motors, said the company is aiming for a 30 per cent share of the Korean market with the intention of becoming one of the world's top motor manufacturers by the year 2010.
Car production will begin in 1998 at a plant near Pusan, which will initially manufacture mid-range 1.8 to 2.5 litre saloons. The company claims that it will be able to produce a new model every year by 2010. Exports are forecast to reach around 55 per cent of the total production by the year 2002.
A Samsung design centre in Los Angeles, which recently bought International Automotive Design West Coast, is already working on prototypes.
South Korean car companies have long been tipped as the sleeping giants of the motor industry. Having learned car technology through joint ventures with American and Japanese car companies they are now starting flex their muscles in markets around the world.
Samsung has been working closely with Nissan, which is providing a range of support, including plant construction, product development, and building a sales operation.