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Trump wants a trade deal, but South Korea doesn't want US cars

SEOUL - US auto imports from the likes of General Motors and Ford must become more chic, affordable or fuel-efficient to reap the rewards of President Donald Trump's attempts to renegotiate a trade deal with key ally South Korea, officials and industry experts in Seoul say. Meeting South Korean President Moon Jae-in last week in Washington, Trump said the United States would do more to address trade imbalances with South Korea and create "a fair shake" to sell more cars there, the world's 11th largest auto market. "What we really want to say to the United States is: Make good cars, make cars that Korean consumers like." While imports from automakers including Ford, Chrysler and GM more than doubled last year largely thanks to free trade deal which took effect in 2012, sales account for just 1 percent of a market dominated by more affordable models from local giants Hyundai and affiliate Kia. Imports make up just 15 percent of the overall Korean auto market, and are mainly more luxurious models from German automakers BMW and Daimler AG's Mercedes-Benz, which also benefit from a trade deal with the European Union. "Addressing non-tariff barriers would not fundamentally raise the competitiveness of US cars," a senior Korean government official told Reuters, declining to be identified because of the sensitivity of the subject. "What we really want to say to the United States is: Make good cars, make cars that Korean consumers like." TASTE BARRIER In Korea, US imports are seen as lagging German brands in brand image, sophistication and fuel economy, industry experts say. US imports do have a competitive advantage in electric cars: Tesla Motors' electric vehicles are seen as both environmentally friendly and trendy, while GM has launched a long-range Bolt EV. US Commerce Secretary Wilbur Ross had cited a quota in the current trade deal as an obstacle to boosting imports. The quota allows US automakers to bring in each year 25,000 vehicles that meet US, not necessarily Korean, safety standards. Should GM, for example, decide to bring in more than its quota of one model - the Impala sedans - it would cost up to $75 million to modify the cars to meet Korean safety standards, the company told its local labor union. Asked about non-tariff barriers, a spokesman at GM's Korean unit said removing them could expand the range of models the company can bring in from the United States. No US company, however, has yet to make full use of the quota, industry data shows.

Hyundai, union reach tentative labor deal

According to Reuters, South Korea's labor unions may have reached a tentative deal with Hyundai following a compromise between the two sides on wages. Workers have staged a number of stoppages since August 20, which have cost the South Korean giant 1.02 trillion won - around $1.1B US. It also represents just over 50,000 units of production. That vehicle total sounds like a lot, but it's a small enough figure that Hyundai can apparently catch up with weekend and overtime shifts. We'd wager that this is why US inventories haven't been hit quite so hard aside from the battering already taking place. The proposal will now go before the union's rank and file.
If ratified, the new agreement will see workers getting a 5.14-percent raise in base salaries, along with 8.5-million-won (roughly $7,800) bonuses. Those concessions are a far cry compared to what the union was initially demanding, though. Early proposals included a 56.25-gram gold medal for each employee (worth about $2,400) and a 10-million won bonus (about $9,100) for employees whose children chose not to attend college. The union also sought a bonus worth two months' salary for workers that have been with the company for over 40 years, but this was negotiated down to a flat rate of six-million won ($5,464).
Based on Reuters' report, the work stoppages must have taken a real toll on Hyundai - its domestic sales dropped 20 percent last month, while exports were down nine percent. Those startling figures must have put some fire under the Hyundai bargaining team.

2016 Hyundai Tucson and Sonata each get TSP+ rating by IIHS

Hyundai is no stranger to building vehicles that get Top Safety Pick+ honors from the Insurance Institute for Highway Safety, but the company is getting two of the awards at once thanks to the latest results from the 2016 Tucson and Sonata. Both models feature a front crash prevention system that's rated highly by the safety agency. The biggest advancement in this round comes for the new Tucson. In the small-overlap front crash, it now earns the IIHS' best score of Good, versus Poor – the lowest – for the previous generation. In the latest test, the crossover shows at most six inches of intrusion into the passenger compartment, compared to 16 inches last time. The airbags work to protect the head, and the sensors indicate a low risk of injury. The Tucson has Good ratings in all the other safety evaluations, too. The 2015 Sonata already did quite well when checked last year, but Hyundai apparently wasn't happy with the sedan's Acceptable result in the small-overlap front crash. According to the IIHS, the automaker adjusted the driver's seatbelt and the front suspension in hopes of a better score. However, even with the tweaks, the 2016 Sonata kept the same result. It scored Good in the other safety categories. The company isn't giving up on acing things, though. "Modifications are planned to take Sonata to 'Good' in the small overlap test," Hyundai spokesperson Jim Trainor said to Autoblog. The IIHS gave the crash prevention tech in both models its top Superior grade. The systems' automatic braking was able to avoid accidents from 12 and 25 miles per hour. The forward collision warning added the last bit needed to give them the maximum six points from the institute. Related Video: Hyundai Tucson and Sonata earn 2015 TOP SAFETY PICK+ awards ARLINGTON, Va. — A redesign for 2016 has taken the Hyundai Tucson from a poor to good rating in the Insurance Institute for Highway Safety's small overlap front crash test. With an available front crash prevention system that earns a superior rating, the small SUV qualifies for the TOP SAFETY PICK+ award. The 2016 Hyundai Sonata also earns a superior front crash prevention rating and a TOP SAFETY PICK+. In the Tucson's small overlap test, the driver's space was maintained well, with maximum intrusion of 6 inches at the parking brake pedal, but no more than 3 inches at other locations. The dummy's movement was well-controlled, and the front and side curtain airbags worked well together to protect the head.