UPDATE 1-Hyundai suppliers eye 400 mln euro Czech investment

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NOSOVICE, Czech Republic, April 25 (Reuters) - Three suppliers to a plant Hyundai Motor Co is building in the Czech Republic plan to invest 400 million euros ($545.6 million) in the country, a Czech investment agency said.

Roman Cermak, head of the state-run CzechInvest agency, said he expected more Hyundai suppliers to set up operations in the country, without elaborating.

The South Korean carmaker broke ground on Wednesday for the construction of its 1.1 billion euro factory in the northeast of the Czech Republic, which will have the capacity to build 200,000 cars annually from March 2009.

Hyundai officials told reporters the three suppliers coming to the European Union member country to serve the new plant were Korean-based firms Daimos, Praco and Seijong.

Hyundai will produce the i30 five-door hatchback and a new compact minivan at the plant in the Czech town of Nosovice, about 360 km (224 miles) east of Prague.

It would share suppliers and co-operate with the first European factory that Hyundai's affiliate Kia Motors Corp. has built for 1 billion euros in neighbouring Slovakia.

Eleven Korean-based suppliers are already serving the Kia factory in the Slovak town of Zilina, which began mass production last December with a capacity of 300,000 units per year and is located just 85 km away from Hyundai's Czech plant.

The heavy influx of foreign investment into automotive and other manufacturing industries has helped power Czech economic growth, fuelling a U-turn in the country's foreign trade balance from a deficit into a surplus.

Analysts say overseas units are key for growth at Hyundai and Kia as they will help them cope with a stronger won currency and possible action from unionised workers.

Hyundai plans to boost the capacity of the Czech factory by 100,000 cars by 2011 to build a third model and help it face intensifying competition in Europe.