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How Hyundai lost momentum, and will 'take a few years' to recover

SEOUL/DETROIT/CHONGQING, China — At a near-empty Hyundai Motor showroom in the Chinese mega city of Chongqing, the store manager is grumbling about his shortage of customers and a lack of bigger, cheaper SUV models popular in the world's largest auto market. Even with discounting of as much as 25 percent, his dealership was selling barely a hundred vehicles a month, said the manager surnamed Li. A nearby Nissan dealership was selling about 400 vehicles a month, a store manager there said. "The sales are simply poor," Li told Reuters. "Look at the Nissan store next door, they have tens of customers while we just have two." An hour's drive away is Hyundai's massive $1 billion manufacturing plant, which opened last year with a target to produce 300,000 vehicles per year. But with sales weak and the Chinese auto market slowing sharply, the factory is running at roughly 30 percent of capacity, two people with knowledge of the matter said. The sources asked not to be identified because the information was not public. Hyundai, the world's fifth largest automaker, declined to comment on the Chongqing plant's production or the showroom's sales but said it is "closely cooperating" with local partner BAIC to turn around the China business. BAIC did not respond to requests for comment. Hyundai's woes mark a major reversal for the automaker which was an early success story in China as it quickly and cheaply rolled out popular new models into a surging market. In 2009, Hyundai and partner Kia's combined sales ranked third in China after General Motors and Volkswagen. The South Korean duo now ranks ninth, and its market share in China was 4 percent last year, from more than10 percent at the beginning of this decade. Executives and industry experts say Hyundai conceded its once stronghold in the low-end segment to fast-growing Chinese rivals such as Geely and BYD. Foreign rivals not only defended their turf in premium segments but also kept pricing competitive for mass-market models, squeezing Hyundai's positioning as an affordable foreign brand, they said. In the United States, the world's second-biggest auto market, Hyundai's market share fell to 4 percent last year, near a decade low. Hyundai ran into problems in China and the United States for similar reasons: It missed shifts in consumer tastes, especially the surge in demand for SUVs, and it sought higher prices than its brand image could command, four Chinese dealers and half a dozen former and current U.S.

Hyundai recalls 570k Sonatas and Accents in two separate campaigns

Hyundai is announcing two recalls that cover a total of 569,500 vehicles in the US for two of the brand's models. There are no reports of accidents or injuries related to either problem, though. The larger and potentially more serious campaign covers 470,000 units of the 2011-2012 Sonata with production dates between December 11, 2009, and April 12, 2012 at Hyundai Motor Manufacturing Alabama. It's specifically for those with the 2.0- or 2.4-liter direct injected engines. During production of the crankshaft, metal debris might not have been fully removed, and those pieces could block the connecting rod oiling passages. This lack of lubrication can increase wear on the connecting rod bearings, and the issue can lead to a loud knocking noise or possibly even a failure while the car is in motion. Hyundai has a two-step process to fix the issue. First, the company will have the vehicles come in for an inspection, and if necessary will "replace the engine assembly." The company will also extend the warranty on the short block to 10 years/120,000 miles for all owners. Notifications will go out by November 2, and there will be a second letter when the parts become available. The other recall covers 99,500 examples of the 2009-2011 Hyundai Accent with manufacturing dates between March 1, 2009, and February 11, 2011. On these models, the brake light switch may begin to only work intermittently. This can lead to a variety of problems, including the brake lights not coming on, the inability to turn off the cruise control with the pedal, and the shifter not moving out of Park. The fix will be a replacement of the switch, and the campaign will begin on November 2. Related Video: RECALL Subject : Connecting Rod Wear may Result in Engine Stall Report Receipt Date: SEP 10, 2015 NHTSA Campaign Number: 15V568000 Component(s): ENGINE Potential Number of Units Affected: 470,000 All Products Associated with this Recall Vehicle Make Model Model Year(s) HYUNDAI SONATA 2011-2012 Details Manufacturer: Hyundai Motor America SUMMARY: Hyundai Motor America (Hyundai) is recalling certain model year 2011-2012 Sonata vehicles manufactured December 11, 2009, to April 12, 2012 at Hyundai Motor Manufacturing Alabama and equipped with either a 2.0 liter or 2.4 liter Gasoline Direct injection engine. In the affected vehicles, metallic debris may not have been fully removed during manufacturing of the engine crankshaft.

Hyundai and Kia introduce new predictive transmission tech

Hyundai and Kia have announced that the two have developed a new transmission control system that optimizes shift logic to both improve efficiency and reduce "gear hunting." The system utilizes real-time traffic data, built-in 3D navigation and the same sensors that feed the cars' advanced safety and driver assist tech to proactively choose the right gear — even neutral in some cases — to reduce both fuel consumption and wear-and-tear. The Korean sister brands call it the "Information Communication Technology Connected Shift System," or "ICT" for short, and Hyundai says it delivers not just improved frugality, but a better all-around driving experience. ICT programming allows the transmission control unit to collect and interpret traffic, camera, sensor, navigation route, elevation and topographical data.  "Using all of these inputs, the TCU predicts the optimal shift scenario for real-time driving situations through an artificial intelligence algorithm and shifts the gears accordingly," the announcement said. "For example, when a relatively long slow down is expected and radar detects no speed irregularities with the car ahead, the transmission clutch temporarily switches to neutral mode to improve fuel efficiency." While this sounds like a primarily green play, there are quality-of-life improvements too. For example, ICT can also optimize gear selection and shift points for safer highway merges, effectively implementing the equivalent of a "Sport Mode" driving profile when a little extra punch is called for.  Hyundai says the resulting decrease in shifts was significant; in some test scenarios, such as roads with lots of curves, the number of shifts executed by the transmission was reduced by almost half. As an added bonus, these vehicles also utilized their brakes less often (11%), which would reduce wear (and accompanying maintenance costs) over time.  ICT is somewhat future-proof, too, as it was developed to incorporate vehicle-to-vehicle (V2V) data should such networks improve down the line.  The announcement did not say when the new tech would reach customers, committing only to introducing the technology "on future vehicles." If we're betting, the smart money says it will probably on a new Genesis model and trickle down from there. Related Video: