PHILADELPHIA (AP) - A Hyundai Motors Group subsidiary next year will begin manufacturing railcars at a new U.S. headquarters in South Philadelphia.

Rotem USA Corp. has finalized a 20-year lease with Rimas Properties that will allow it to develop the new facility in the city's Pennsport neighborhood. The company plans to invest $10 million into upgrading the property.

The plant will produce railcars for the Southeastern Pennsylvania Transportation Authority and other transit agencies, officials said. The company has said it expects to reach full-scale production, about 200 railcars a year, by the end of next year.

Rotem has a $176 million contract to make 87 cars for the Southern California Regional Rail Authority and a $244 million deal to assemble 104 railcars for SEPTA.

Rotem USA is the American subsidiary of Rotem Co., a division of Hyundai.

Rotem had previously planned to build the cars elsewhere in South Philadelphia, but the new site is bigger and will require less refurbishing, officials said.

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