Radio Prague reported Monday that Hyundai has agreed with the Czech Republic on a plan to invest up to $1.2 billion towards a new factory in Nosovice. The deal was confirmed by Hyundai Motor VP In-Seo Kim, and marks the end of a protracted negotiation for the site of the automaker's first European factory.

The new facility will come online in 2008, employing 3,000 workers and with a capacity of 300,000 vehicles per year.

Reuters reports that the deal includes about $173 million in direct state support, not including tax breaks.

Expanding overseas production is a key strategic move for Hyundai, which has been hurt by the recent strength of South Korea's currency. On the Czech side of the equation, its surging auto industry powered the country's economy to a record 6-percent growth last year.

[Sources: Radio Prague, Reuters, Hyundai]