Lawrence’s largest auto dealership is getting bigger.

Laird Noller Automotive is adding a Hyundai dealership at 2829 Iowa, the culmination of a two-year effort to find the growing South Korean automaker a home in town.

The Hyundai dealership is taking the place of Laird Noller’s Mitsubishi operation, which is being downsized and relocated to Laird Noller’s main facility at 23rd and Alabama streets, where Laird Noller already sells new Ford, Lincoln-Mercury and Mazda vehicles, plus an array of used vehicles.

With Mitsubishi sales lagging, Laird Noller officials are counting on Hyundai’s lineup of small cars and sport utility vehicles to compete on price and quality with other dealers along South Iowa Street — particularly Crown Automotive, which is expanding its Toyota sales as part of a $3.8 million project down the street.

“We’re looking forward to the challenge,” said Derick Tagtmeyer, manager for the new Hyundai dealership. “Toyota’s a monster. They’ve built their name. They’ve got every part of the market covered: small cars, hybrids, trucks, SUVs, minivans. We just feel we’ve got a little niche with Hyundai. … We think it’s a good opportunity.”

Miles Schnaer, owner of Crown Automotive, said that he was looking forward to the Hyundai dealership drawing more traffic to all the auto dealers along South Iowa Street. And “while it’s hard not to be concerned” about the competition, he’s confident that his Toyota, Chevrolet and used-car offerings will be able to fare well.

“Everytime somebody comes in the market, we just have to keep doing our thing,” Schnaer said. “They’re going to sell cars, and we’re going to continue selling cars. We’re not KU vs. K-State and we’re trying to win. We’re just trying to sell cars and make money.”

Laird Noller received its first shipment of 18 Hyundais last week and has room on its three-acre lot for up to 50 Elantras, Sonatas, Santa Fe SUVs and other models. An additional 50 or 60 used cars, with no limits on makes or models, also are for sale.

The location is slated to get a makeover from its 1970s roots, when it operated as a lot and showroom for Datsuns and Toyotas. Laird Noller bought the 14,000-square-foot building and lot a decade ago, and plans to revamp the front to project an updated look.

Dean Holthaus, left, a Laird Noller Hyundai salesman, talks with Bill Nichols, Lawrence, about a 2005 Tiburon GS on Wednesday at the dealership, 2829 Iowa.

The Hyundai dealership will include a full-service maintenance shop and parts department on site. Laird Noller is looking to hire up to seven new employees, including a service manager and parts manager.

The Mitsubishi vehicles are returning to same showroom Laird Noller had built for the brand in 1991. That showroom, at 23rd and Alabama streets, also is home to a used-car operation that will remain, said Gary Bennett, general manager of Laird Noller Automotive in Lawrence.

Laird Noller had considered dropping Mitsubishi but worked out a deal to keep the brand in town.

“We’re giving the bigger facility to the car line that we see more opportunity with,” Bennett said. “Hyundai sales have been increasing every year. They’re up to 450,000 now, and their goal is to have a million by 2010. They’ve really set some lofty goals.”

Hyundai Motor America, a division of South Korea-based Hyundai Motor Co., said it sold 418,615 vehicles in 2004, up 5 percent from a year earlier. Sales have increased for four consecutive years.

Company officials are counting on this year being even bigger, as Hyundai formally dedicates its newest plant — a $1.1 billion, 1,744-acre complex — this week in Montgomery, Ala. The plant will be capable of producing 300,000 vehicles a year.

Hyundai started the year with 660 dealers in the United States, and plans to have another 30 open by the end of the year, said Charlene Jacobs, a Hyundai spokeswoman. Laird Noller already has a Hyundai dealership in Topeka.

Bennett said that Laird Noller had been held off from opening a Hyundai dealership in Lawrence until the new plant could come online.

Now he’s hoping to do his part by selling 25 to 30 new Hyundai vehicles each month.

“We’re definitely looking at getting more of the small-car market,” Bennett said.