but executives said it would be difficult to sell cars because of quality issues, said the executive in Seoul.
Now, there is a push from the bottom. Executives now say they can sell more cars. The move is motivated by the chairman's effort to keep Hyundai from making the mistake Toyota made, another source said, referring to a perception that the Japanese automaker lost control of engineering discipline and manufacturing quality during the 2000s, as it expanded too aggressively and its global capacity climbed well above 8 million vehicles a year.
Plans to build a factory in Indonesia, another emerging market with large growth potential, were scrapped due to Chung's decree, the source told Reuters.
The expansion freeze has already crimped sales growth in the United States. Hyundai's U .S. sales expanded just 8 percent from January to October this year from the same period a year earlier, more than half the 20 percent growth achieved in 2011.
Hyundai shares fell 11 percent in October alone, in part on concerns over slower growth.
Investors are concerned that Hyundai's sales volume will not increase much next year because of its limited production capacity, said Jung Sung-man, a fund manager at Plus Asset Management in Seoul. But Hyundai's growth engine will not stall. Hyundai has piled up cash enough to build new plants.
At its factory 50 km (30 miles) outside Chennai in southern India, a steady stream of buses ferries about 2,000 workers to and from the plant as three shifts run around the clock.
Hyundai doubled annual capacity at the plant to 600,000 cars in 2008, and was operating at full tilt within three years.
In 2009, it exported nearly half of its Indian production to markets in Asia, Africa, Europe and the Middle East, but only 40 percent last year.
Next year, overseas shipments, including to high growth markets such as South Africa and Mexico, will likely account for just 35 percent of India production, the plant's production manager told Reuters, as local demand absorbs output.
Capping capacity to focus on quality might be a shrewd