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Hyundai boosted production in March, so now its cars sit in U.S. ports

SEOUL — As Detroit's automakers shut production in March due to the coronavirus pandemic, South Korea's Hyundai cranked up its factories back home to ship cars to the United States, a move that is proving costly for the world's fifth-largest auto group. Hyundai ramped up domestic production to as much as 98% of capacity by late March, not only as the Korean market was recovering from a bad February but also because it bet on demand for Tucson SUVs and other models from U.S. customers, its biggest overseas market outside of China. While Hyundai is one of few global automakers whose production has recovered at home, its exports optimism has been dampened by the severity of the U.S. outbreak, weak consumer sentiment and as rivals have quickly moved to guard their turf. Consignments of cars shipped from South Korea are now sitting in U.S. ports, with dealers slow to take deliveries because of slumping sales and rising inventory, four people with knowledge of the matter told Reuters. The company idled a Tucson production line at home last week for five days, while sister firm Kia is looking to suspend three Korean plants for a week. And analysts now expect a sharp drop in first-quarter operating profit when it reports results on Thursday and some even forecast a second-quarter loss. "I hope that the situation will recover by the middle of next month. If not, we might have to lay off some people," said Brad Cannon, general manager of an exclusive Hyundai dealership in California, whose sales are down more than 50% from when the pandemic started. Hyundai runs a factory in Alabama — which is closed until May 1 — but imports are key to meet U.S. demand. Only about half of its vehicles sold in the United States are made in North America compared to between 68% and 85% for Japanese rivals Toyota, Nissan and Honda, who have also suspended production there till May. The South Korean company makes about 61% of its cars overseas, up from 48% a decade ago. That leaves it vulnerable to overseas factory shutdowns and shrinking demand outside of its home market. Hyundai's South Korean factory operation, which had recovered from a component shortage from China to nearly 100% capacity by March, could fall to as much as 70% in April, the company recently told analysts. "We will continue to monitor the situation and take appropriate action promptly," Hyundai said in an emailed statement. Minimizing the impact For its part, Hyundai has taken measures to minimize the impact.

U.S. appeals court preserves $210M Hyundai-Kia fuel economy class settlement

A U.S. appeals court restored a $210 million nationwide class-action settlement for hundreds of thousands of owners of Hyundai Motor Co and Kia Motors Corp vehicles whose fuel economy estimates were inflated. By an 8-3 vote on Thursday, in a case closely watched by class-action lawyers, the 9th U.S. Circuit Court of Appeals in Pasadena, California, said vehicle owners had enough in common to let them settle as a group. It also rejected arguments by owners opposed to the settlement that the claims process was too burdensome, and that lawyers for the class had colluded with the automakers to extract a "sweetheart deal" that undervalued their claims. The case began after the U.S. Environmental Protection Agency found flaws in Hyundai's and Kia's testing procedures, prompting the automakers to lower fuel efficiency estimates for about 900,000 vehicles from the 2011, 2012 and 2013 model years. Lawyers for objecting drivers had no immediate comment. Hyundai said it was grateful for the decision. Kia and its lawyers did not immediately respond to requests for comment. The decision by Circuit Judge Jacqueline Nguyen upheld a settlement approved in June 2015 by U.S. District Judge George Wu in Los Angeles. Wu "made careful findings, which the objectors here largely do not challenge, and which more than support the judgment," Nguyen wrote. The decision reversed a divided three-judge 9th Circuit panel's January 2018 rejection of the settlement and decertification of the class action. That panel said Wu failed to assess whether differences in state laws prevented certification of a nationwide class. It also said used car owners should have been excluded because it was unclear whether they had relied on the South Korean automakers' fuel economy claims. Lawyers had said it would become much harder to obtain nationwide settlements if the panel ruling stood. Nguyen had dissented from the panel ruling. Circuit Judge Sandra Ikuta, who wrote it, dissented on Thursday. Ikuta accused the majority of failing to determine what law should apply to the nationwide class or how the settlement, and thus attorneys' fees, should be valued. "The majority's failure to correct these errors may be beneficial for the class action bar, but it detracts from compliance with Supreme Court precedent," Ikuta wrote. The 9th Circuit covers nine western U.S. states, Guam and the Northern Mariana Islands.

2020 Kia Niro electric car gets a $590 price hike

Kia Niro EV shoppers will need to budget a little more for the purchase, the South Korean automaker raising the price on its only U.S.-market electric car by $590. Cars Direct spied an order guide saying that after a $1,120 destination charge, the base Niro EX electric will climb from $39,620 to $40,210. The only other trim, the EX Premium, goes for $45,120 for the 2019 model to $45,710. The prices don't include the potential $7,500 federal tax credit or other incentives the hatchback still qualifies for. Adjustments to the EV MSRPs compare to price increases of $990 and $1,190 for the two trims of the 2020 Niro PHEV, and a mix of price drops and increases of several hundred dollars for the standard Niro's rearranged trim line.     Around this time last year, the Niro EV cost $1,500 more than the Hyundai Kona EV, now the Kia and Hyundai are separated by $1,900. The Niro EV's 64-kWh battery can power its 201-horsepower motor up to 239 miles of EPA-rated range, the Kona EV, with the same mechanical specs, is EPA-rated for up to 258 miles. Kia didn't make any changes to the 2020 Niro EV other than price. The whole Niro lineup, however, debuted its new refresh at last year's L.A. Auto Show. That brought tweaks to the front fascia such as new headlights and fog lights and a grille with diamond-shaped inserts, the electric Niro distinguished from the other two powertrains by getting a single chevron fog light instead of dual chevron lights, omitting the chrome underlining on the grille, and picking up blue accents around the lower intake. In back, there's a redesigned housing for reflector units in the bumper, and more blue highlights. Inside, a redesigned, seven-inch digital instrument cluster sits behind the steering wheel, and new optional driving aids include lane following and lane-keeping assist. Meanwhile, the wait continues for the Kia EV we really want, the fun and less expensive battery-electric Soul and its 243-mile EPA-rated range.  Related Video: