2003 Hyundai Gls on 2040-cars

Auto blog

Hyundai, Kia looking to cut costs

Hyundai and Kia are off to roaring starts in the United States this year, underscored by Kia's best sales month ever in May. But globally the situation for the South Korean siblings hasn't been nearly so positive. Recently, they reported their fourth consecutive quarter of decreasing operating profits worldwide, and now they're "making efforts to cut costs," according to a statement in a joint email obtained by Bloomberg. However, the companies aren't detailing where they would make the cuts or how much they want to save. The amount could be significant, though. An unnamed Hyundai senior executive reportedly told a South Korean newspaper that the business might be aiming for up to 30 percent in reductions. According to Bloomberg, Hyundai and Kia are facing falling total sales worldwide. Making the situation worse is that the strong Korean won versus the weaker Japanese yen gives competitors an advantage. The automakers also angered investors enough last year to prompt a stock buyback after paying $10 billion for the land for a future headquarters. The prognosis doesn't look utterly dire, though, and new products are on the way. For example, the Hyundai Santa Fe is being refreshed in South Korea, and the next-gen Elantra debuts at this year's Los Angeles Auto Show. There's also the Creta on the way for foreign markets. Additionally, several models are still awaiting the green light, including a Hyundai Genesis-based luxury crossover, a compact CUV, and the Santa Cruz unibody pickup. Meanwhile, the Kia GT is reportedly close to production, too. Related Video:

South Korea firms up fuel economy regs following Hyundai/Kia debacle

According to a report from Reuters, South Korea's government has drafted strict new rules for automakers to follow when calculating fuel economy. The legislation comes after a major snafu by Hyundai and Kia that resulted in the automakers lowering the estimated fuel mileage of many popular models - some by several miles per gallon, including the Soul subcompact above - and compensating owners in the US and Canada for the reduction.
The new fuel economy rules were announced by the Ministry of Trade, Industry and Energy in South Korea and will see average mileage ratings drop by roughly three to five percent, according to the report. In addition, manufacturers found guilty of overstating mileage figures will be liable for fines of up to $900,000.
These sweeping new regulations will go into effect in the second half of 2013 and, while they won't have any effect on EPA estimates for Hyundai and Kia vehicles in the United States, they are expected to result in new ratings for the two automakers in their home market of South Korea, where they enjoy a whopping 70-percent market share.

What a strike in Korea could mean for US Hyundai and Kia buyers

A prolonged factory strike at Hyundai-Kia factories in South Korea could mean that US dealership inventory of certain vehicles, such as the South Korea-built Hyundai Accent and Kia Soul, could dry up in the coming months, depending on the length of the strike, reports Cars.com's blog, Kicking Tires. The two brands together rank sixth in US sales and fifth in global sales.
Kicking Tires gives fascinating insight into how a production stoppage in South Korea might affect vehicle sales in the US, considering Hyundai-Kia has two factories in the US that build the Kia Sorento and Optima/Optima Hybrid, and the Hyundai Elantra sedan/coupe/GT, Sonata/Sonata Hybrid and Santa Fe/Santa Fe Sport. The only one of these vehicles that's built solely in the US is the Kia Sorento, with the rest of them sharing production with South Korea.
Be sure to read the piece, especially if you're in the market for a Hyundai or Kia, or just interested in global economics.