While a growing number of its rivals are scaling back production, Hyundai-Kia Automotive Group is set to embark on an aggressive expansion. It aims to increase its production by 58 percent to 6.5 million cars in 2013 from 4.18 million in 2008. This would make it the world's fourth largest automaker, up from the current fifth.

Korea's leading car manufacturer announced Thursday that it plans to produce 3.38 million vehicles at home and 3.12 million abroad in 2013. It recently informed 300 major subcontractors of the plan and urged them to expand their production facilities to keep pace with its goal.

Under the plan the ratio of domestic to overseas production will shift to 52:48 by 2013 from 60:40 during the first seven months of this year. The automaker will also introduce 15 new models, including updates, every year starting from next year.

To expand overseas production Kia Motors will ramp up operations at its plant in Georgia in the U.S. late this year, while Hyundai is building a plant in Russia slated to begin mass production in late 2010. Also, Hyundai last week resumed a project for a Brazilian plant that had been suspended since the end of last year.

K-pop star Lee Hyo-ri poses in front of Hyundai's i30 at an event showcasing the new model at Beijing Science and Technology University Gymnasium in China on Wednesday. /Yonhap

Hyundai-Kia's ambitious plans are in stark contrast with the belt-tightening at its competitors, including world leading carmaker Toyota, which announced that it would slash production by a million units in fiscal 2009 alone (April 2009-March 2010).

According to industry researcher Global Insight and the Korea Automotive Research Institute last month, Hyundai-Kia sold 2.21 million vehicles in the first half of this year, up 4.3 percent on-year. It was the only one of the world's 10 largest automakers to see an increase in sales. Volkswagen and Fiat showed relatively small sales declines of 3.2 percent and 9.3 percent, but others including Toyota posted contractions of 20 to 40 percent.

Experts believe the Korean automaker has gained confidence in the global market thanks to improvements in its designs and performance alongside its traditional reputation of good quality for value. In addition, boosting output can lead to a reduction in costs per unit, enhancing price competitiveness.

However, many claim that the automaker's robust performance is an illusion achieved only due to a favorable exchange rate and its dominant, 80-percent market share at home. Some also say that Toyota and Honda will surge ahead again with green technologies and products.

"Hyundai-Kia still has problems of low productivity at domestic factories and inefficiency in its overall operation system which has failed to adapt to global changes," said Lee hang-koo of the Korea Institute for Industrial Economics and Trade. "Its excessive expansion of production could invite bigger challenges if external factors deteriorate."