SEOUL - TOP South Korean car maker Hyundai Motor has no current plan to raise car prices, even though rising raw material prices are lifting production costs, its chief executive said on Friday.

Higher steel sheet and other raw material prices are big concern to car makers, which are also suffering from weak demand because of rising fuel prices and on concerns about the spreading fallout from the US subprime mortgage crisis into job markets.

'Because of raw material prices we are spending about 500,000 won (S$708) more producing a car,' Kim Dong Jin, CEO and vice chairman of the automaker, told reporters ahead of a meeting with other business leaders and prime minister Han Seung Soo.

When asked if Hyundai could not help but raise car prices, Mr Kim said: 'No. That's not the case.' But the CEO confessed to difficulties in coping with cost increases, saying that cost-cutting efforts might not be enough to absorb material cost increases.

Hyundai is the world's sixth-largest auto maker by sales volume along with its affiliate Kia Motors.

Shares in Hyundai fell 3 per cent to close at 78,200 won prior to the remarks, underperforming the flat KOSPI index . The stock is up almost 10 per cent so far this year, easily outperforming the broader market's near-7 per cent decline. -- REUTERS