Seoul  - South Korea is set to see rivalry between car makers Hyundai and Toyota as they compete for market share with their environmentally-friendly hybrid vehicles.

Around 1.1 million cars are sold in South Korea each year. South Korea-based Hyundai began selling its first hybrid in July and Japan's Toyota is ready to launch its Prius there in the months ahead, reports say.

Hyundai's hybrid is powered by both liquefied petroleum gas (LPG) and lithium-ion polymer batteries, while the Prius is powered by both petrol and electricity.

According to Hyundai, its new Elantra can travel 17.8 kilometres on a litre of LPG or 38.5 kilometres for the price of 1 litre of gasoline. The Prius claims a fuel economy of 38 kilometres per litre.

The LPG-battery hybrid, largely based on the existing Elantra, is unusual as few countries use LPG to fuel cars. That is why Hyundai's LPG-battery hybrid is to be sold only in South Korea, where there are many LPG filling stations.

The company says it has no plan to export the LPG-battery car because of the rarity of LPG infrastructure outside South Korea. Instead, Hyundai says it plans to introduce a gasoline-electric hybrid in the US next year.

The LPG-battery hybrid will help Hyundai to better defend its home turf against a green push from Toyota. The Japanese car maker currently sells only hybrid SUVs in Korea but media reports say that Toyota is ready to launch the Prius there in the months ahead.

In response, Hyundai says it aims to sell 7,500 LPG Elantras by the end of this year and 15,000 more in 2010. The car will sell for between 20.5 million won (16,000 dollars) and 23.2 million won after some tax breaks.

Toyota faces a challenge in cracking the Korean market with its Prius. Hybrids are hot sellers in Japan with the Prius the first hybrid car to outsell all other vehicles there, according to Japan's Automobile Dealers' Association. However, in South Korea, Hyundai's luxury sedan usually tops the list of cars sold.

More than 1.25 million Prius cars have been sold since its launch in 1997 and the third generation model hit the market in May. (dpa)