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Hyundai sales slump in China over North Korea, standoff with Chinese partner

BEIJING/SEOUL — Hyundai is at loggerheads with its Chinese partner over efforts to cut supplier costs, as they grapple with cutthroat competition and the impact of a standoff between Beijing and Seoul. Hyundai, along with affiliate Kia, has been caught up in a political row over a missile defense system that is being deployed in South Korea, but opposed by China, as tensions grow over North Korean missile tests and last week's test of a nuclear bomb the North claims can be mounted on a missile. Sales of Hyundai cars in China have been falling, part of a backlash against South Korean brands over the missile system that China views as a threat to its own national security. On Tuesday, South Korea asked the United States to lift a limit on the explosive payloads it can use in the missile system. This as a North Korean missile, believed to be an intercontinental ballistic missile, was being tracked by intelligence services being moved on the ground toward North Korea's west coast and a possible launch site. That has come against the backdrop of ever tougher competition from local Chinese automakers. Until last year, Hyundai and Kia ranked third in China by sales. But Hyundai's sales alone have slumped 41 percent from January to July, fraying relations with local partner BAIC Motor Corp and making this the biggest crisis since Hyundai entered the Chinese market in 2002. Last month, Hyundai suspended production at its four China plants for a week after a French supplier refused to provide fuel tanks when its bills went unpaid. On Tuesday, Hyundai suspended production at one of its plants in China after a German firm went unpaid. Hyundai and BAIC — whose Beijing Hyundai joint venture is a 50:50 partnership — are divided over how to solve the issue of suppliers and tougher competition. Hyundai wants to protect its South Korean supply chain, while BAIC favors shifting to cheaper Chinese suppliers to cut costs, the people said. "BAIC wants to solve this aggressively and is ... asking Hyundai to change its sourcing strategy significantly and immediately," said the head of a Hyundai supplier based in Seoul, adding the idea was to source more locally from cheaper suppliers in China. Hyundai wants to solve this more gradually "over perhaps 5-10 years and do so in phases," the person said. BAIC declined to comment.

2021 Kia Sorento officially revealed with crisp new duds

Following an unofficial reveal in spy shots, the 2021 Kia Sorento crossover has just been shown officially by the automaker. The company released images of its chiseled exterior and rugged but upscale interior. On the outside, the Sorento picks up many of the cues established by the upcoming Optima/K5, including the broad and angular grille. The front and rear fascias have loads of creases and geometric openings, while the rest of the body is a bit more subtle. The profile is less upright than that of the Telluride, but the chrome window trim has a little dorsal fin on the lower section like the bigger crossover, as well as some of Kia's overseas wagons. The overall profile looks like the Sorento will still have room for an optional third row of seats like the current one. These official photos give us our best look yet at the Sorento's interior. It builds on the low and wide dashboard design of the Telluride, but gives a more aggressive, angled look, particularly with the center stack and climate controls. The stack and vents look as though they were folded forward, which angles the controls up and out toward the occupants. The vents are shaped like trapezoids, and the door handles have a beveled square design. You can also make out a diamond grid pattern in the aluminum-look trim on the dashboard, along with accent lights in the doors that mirror them. The Sorento is available with a 10.25-inch infotainment display and a 12.3-inch instrument screen. There are still a number of details left to learn about the Sorento, such as its powertrain, features and pricing. We should get more of that when it makes its official debut at the Geneva Motor Show on March 3. The current Sorento is available with either a four-cylinder or V6 engine, and front- or all-wheel drive. The options for drive wheels will likely continue, though it's unclear what engine options will be available, since it's possible a V6, like the Telluride's 3.8-liter, could be used, or perhaps a turbocharged four-cylinder from the Optima/K5 and Sonata.

Hyundai finally settles inflated fuel economy claims lawsuit for $41.2 million

Remember when Hyundai and Kia changed their claimed fuel economy numbers for a bunch of models? That happened back in 2012, and Hyundai has finally settled a lawsuit concerning the economy adjustment with a payment of $41.2 million. The lawsuit was filed by 33 state attorneys general, as well as one from Washington D.C. Each state will decide how to use its money from the settlement. According to Hyundai, this settlement was an "amicable agreement," and the company also denies any wrongdoing in changing claimed fuel economy numbers. Hyundai also reports that the agreement was reached, in part, due to the reimbursement program instituted after the economy adjustment. This program allows owners to be reimbursed the extra fuel cost, with payments determined by miles driven. The payments are sent after an owner has an affected car's odometer checked by a dealer. In addition, Hyundai also offered lump-sum payments as an option after the results of a class-action lawsuit. So far, the company reports about 75 percent of eligible owners have participated in the program. This isn't the only major payment Hyundai has made concerning the fuel economy issue. In 2014, Hyundai paid roughly $300 million in fines to the EPA. The company was also sued for inflated fuel economy claims in South Korea. In the US, models affected by the adjustment include the Hyundai Santa Fe, Accent, Veloster, Sonata Hybrid, Tucson, Genesis and Azera, along with the Kia Soul, Rio, Sorento, Sportage and Optima. Related Video: Image Credit: Patrick T. Fallon/Bloomberg via Getty Images Government/Legal Green Hyundai Kia