Hyundai Motor Co. Ltd. is narrowing down its choices for the location of a U.S. manufacturing plant to two to three potential sites, with a final decision to be announced in the first half of next year, says Chief Executive Kim Dong-Jin.

The automaker now has the field narrowed to seven possible locations in five states. Mr. Kim would not specify a general location, but it is widely believed to be in the southeastern U.S.

Hyundai’s future U.S. plant is part of an overall strategy of localizing design, engineering and production in major markets.

The first outgrowth of its strategy was the Santa Fe cross/utility vehicle, designed in the U.S. Mr. Kim says the automaker will concentrate its North American design efforts on expanding its sport/utility (SUV) lineup. A future SUV — and potential vehicle for production at a U.S. plant — likely will be larger than the Santa Fe and similar in size to the Ford Explorer.

Meanwhile, Mr. Kim says that since the Sept. 11 terrorist attacks in the U.S., Hyundai’s sales only have increased. As a result, the automaker has boosted its U.S. sales targets for 2001 to 335,000 units, from 320,000.

The strong demand may be a result of consumers shopping for more economical vehicles in the wake of economic uncertainty and widespread 0% financing offers that have fueled dealership traffic for all makes.