July 7 (Bloomberg) -- Hyundai Motor Co., South Korea's largest automaker, raised prices for its Elantra and Accent small cars exported to the U.S. to cover the rising cost of steel and other materials.

Hyundai boosted basic prices for the Elantra by $300 and for the Accent by $200 as of July 1, Hyundai's Seoul-based spokesman Jake Jang said in a phone interview today. The starting retail price for the Accent is $10,775 and $13,625 for the Elantra, according to Hyundai's Web site. Yonhap News agency earlier reported the price increase.

Earnings from Hyundai's 1.3 percent gain in U.S. sales last month are being eroded by the rising cost of raw materials. Posco, South Korea's biggest steelmaker, has boosted the price of sheet steel by 63 percent this year to recover its own raw- material cost increases.

The price of benchmark hot-roll coils used to make auto bodies and parts has been raised three times since February to 850,000 won ($796) per metric ton at Posco.

Seoul-based Hyundai's sales in the U.S. last month were lead by a 70 percent jump in orders for the Accent and a 50 percent gain in Elantra purchases, the company said on July 1. Rising fuel costs in the U.S. are boosting demand for small, fuel-efficient cars.

Hyundai fell 1 percent to 71,100 won at the close of trading in Seoul. The shares have declined 0.7 percent in this year, compared with benchmark Kospi index's 17 percent retreat.

To contact the reporter on this story: Seonjin Cha in Seoul at scha2@bloomberg.net

Last Updated: July 7, 2008 02:57 EDT