SOUTH Korea is the sixth-largest car producer in the world with an annual output in excess of two million units. But this is expected to change. If production forecasts are met, Korea will become the fifth-largest by the year 2000, after Japan, Germany, France and the United States. South Korea's International Trade and Industry Ministry estimated that, by the beginning of the next century, the industry will challenge France for fourth place with an annual output of 5.5 million units. Korean manufacturers, with overseas assembly plants in more than 20 countries, have announced plans to double production by the year 2000. Exports account for approximately 38 per cent of total production, with chief markets being Southeast Asia and South America. Daewoo claims Chile and Peru as two of its most valuable markets. Daewoo used the slogan, 'The biggest car company you've never heard of', in its bid to enter the competitive British market this year. Rather than market its cars through dealers, Daewoo established sales centres, complete with children's play areas and coffee shops. This approach skips discounts and extras. What the customer gets is a straight, no-nonsense price. To date, Daewoo has sold 4,000 cars in Britain using this consumer-friendly tactic. Within three years, the firm expects to sell up to 20,000 units annually. Best-selling models included the Espero and Racer, both variations on General Motors' models. Korea's largest car producer, Hyundai, is also a major ship-builder. It entered car manufacturing in 1974 when a motor industry veteran, the late George Turnbull, created the Hyundai production line within the shipyard. He was credited with establishing an assembly plant where Hillman Hunters were made from kits imported from Britain. Despite the severe weather conditions, the plant aims to produce over one million units annually. Last year, Hyundai achieved over 50 per cent market share in South Korea, selling 528,000 units and exporting 351,000. Korean International Motors Limited imports four Hyundai models to Hong Kong. They range from the luxury three-litre, V6-engine Sonata and the 1.8-litre Elantra to the smaller 1.5-litre Scoup and Accent models. Top seller is the Elantra automatic, which accounts for more than half of all sales here. Sales and marketing manager Edwin Cho explained: 'We cannot obtain sufficient units of the Sonata - a worldwide problem - but sales of the Elantra and Accent account for two per cent of the overall Hong Kong market.' Daewoo's plans do not worry Mr Cho, despite the company's success in Britain. 'The entry of Daewoo into Hong Kong does not represent a problem,' Mr Cho said. He claimed Hyundai had a higher build-quality than Daewoo which used 'out-dated' GM designs.' Another major manufacturer to enter car production is Samsung, Korea's second-largest industrial concern, through its association with Nissan of Japan. Although both Hyundai and Daewoo opposed Samsung's manufacturing licence, it was granted by the government late last year. Production is due to start in two years. The new company is an offshoot of Samsung Heavy Industries, which began production of eight and 15-tonne trucks last year. Samsung Motors expects to produce 65,000 two-litre sedans after 1998. Other manufacturers include Kia, 10 per cent of which is jointly owned by Ford and Mazda, and Ssangyong, which is partially owned by Mercedes-Benz, and produces commercial and four-wheel drive vehicles. It plans to build Mercedes cars in 1997. Kia is the only Korean manufacturer with a European assembly plant. Daewoo, however, is recruiting staff for its British design studio in West Sussex. Daewoo has a major stake in the Romanian car manufacturer, Oltcit, and intends to export models to other parts of Europe. Besides its British design operation, Daewoo intends to establish a European design centre in the German city of Munich under engineer Ulrich Bez, formerly of BMW and Porsche. In a separate development, Kia Motors and Daewoo have agreed to co-produce car components in an effort to increase competitiveness. Hyundai, is involved in various joint ventures in China, aims to expand its involvement on the mainland.