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Hyundai, Kia earmark $760 million to settle U.S. lawsuits over engine fires

SEOUL — Hyundai and affiliate Kia have earmarked 900 billion won ($758 million) to settle U.S. class action litigation and address engine-related issues including fires and failures in the United States and South Korea. The move marks the South Korean auto giant's first major effort to resolve years of trouble over engine defects that have also sparked probes by the U.S. safety regulator and prosecutors. Hyundai Motor will make a provision of about 600 billion won in its July to September earnings while Kia will book one for about 300 billion won, they said on Friday. Hyundai and Kia said in a statement that under the U.S. settlement they would install software to monitor for symptoms of engine failure and take other steps, including offering compensation options and lifetime warranties. A total of 4.17 million Hyundai and Kia models equipped with Theta II gasoline direct injection (GDI) engines, which were sold in naturally aspirated 2.0-liter and 2.4-liter displacements, and had a turbocharged derivative, will be affected by the U.S. settlement. Hyundai and Kia, together the world's fifth-biggest automaker by sales, recalled nearly 1.7 million vehicles in the United States to address the possibility of engine fires. In November, Reuters reported that U.S. federal prosecutors had launched a criminal investigation to determine if the recalls had been conducted properly. Since 2017, the U.S. safety regulator has been investigating whether the recalls covered enough vehicles and were conducted in a timely manner. The investigation comes after Kim Gwang-ho, then an engineer at Hyundai, flew to Washington in 2016 to tell the National Highway Traffic Safety Administration (NHTSA) the companies should have recalled more vehicles over the problem, citing an internal report. Hyundai Motor at that time denied allegations. The NHTSA this year opened a fresh investigation into 3 million Hyundai and Kia vehicles after reviewing reports of more than 3,000 fires that injured more than 100 people. That probe came in response to a petition seeking an investigation filed in June by the nonprofit Center for Auto Safety.

Kia's Super Bowl ad parks the Optima in a Walken closet

Kia has a weird marketing strategy to sell the Optima in its Super Bowl commercial titled Walken Closet. The humorous spot stars actor Christopher Walken who appears to live in a closet, and he describes the South Korean brand's midsize sedan as "as the world's most exciting pair of socks." Walken is famous for his unique voice, and he enunciates Kia Optima in this ad like no one else can. The ad markets the Optima as the midsize sedan for customers who want something more exciting from the segment. According to Walken, other vehicles are like beige socks, but the Kia has "pizzazz." Comparing a vehicle to a pair of socks still doesn't get the heart racing, though. You can watch a 90-second version of Walken Closet above. Kia will premiere the 60-second cut during the four quarter of the Super Bowl. CHRISTOPHER WALKEN ADDS "PIZZAZZ" TO KIA MOTORS' SUPER BOWL COMMERCIAL FOR THE ALL-NEW OPTIMA MIDSIZE SEDAN Kia is the First Brand to Utilize a New Technology Solution from Influential That Taps IBM Watson for Influencer Identification as Part of Multifaceted Marketing Campaign Extended cut of "Walken Closet" can be viewed now at YouTube.com/Kia; 60-second broadcast version will debut during the fourth quarter of Super Bowl 50 #AddPizzazz social media campaign includes partnerships with Mobile First influencer platform Influential, social media creator network Niche, and lifestyle apparel brand Stance, to engage creators and generate content across a variety of channels IRVINE, Calif., February 2, 2016 – There's no one quite like Christopher Walken – he is an original. And in Kia Motors America's (KMA) 2016 Super Bowl commercial, the Academy Award-winner employs a colorfully stylish sock to demonstrate how the next generation Optima stands out in the midsize sedan segment filled with entries that look and drive the same. Premiering today on YouTube.com/Kia – and set to air in the fourth quarter of the big game – "Walken Closet" is the centerpiece of Kia's multiplatform campaign spotlighting the all-new 2016 Optima as the vibrant alternative for those searching for more in a vehicle segment whose hallmarks are basic, boring and uninspired. As Walken explains in the spot, "There are two kinds of people in this world. Those who are content to blend in ... then there are those who expect more. They're exciting.

Nuclear deal could make Iran next big car market

Iran is a huge and hugely appealing target for Western firms - it's population is nearly the size of Germany's, it is well educated and includes a substantial middle class, and there is a built-in industrial capability. Because of the sanctions that have been in place for nearly five years now over its nuclear program, however, its citizens and domestic industry haven't been able to purchase and expand, so investment opportunities are not only manifold, they are severely undervalued. Most of the auto industry has been sitting on the sidelines waiting for the Iranian game to start. A report in Automotive News says that Iran's two automakers, Iran Khodro and SAIPA - Societe Anonyme Iranienne de Production Automobile - produced one million light vehicles last year for 77.5 million people. According to Wikipedia there were 200 vehicles per 1,000 citizens in 2012, and that was before the industry took a nosedive. That number puts it between Uruguay and Jamaica. Chery, Kia, Peugeot, and Renault were the carmakers with major operations in-country before all but Chery pulled out. In the vacuum, Chery and other Chinese automakers have thrown lots of product at the market, getting 27 models in a range of segments built or supplied there, with results that are probably best described as ambivalent among observers but financially lucrative for the Chinese. Peugeot has re-established ties, and Kia, Mercedes-Benz, Peugeot, Renault, Toyota, and Volkswagen were attendees at the Iran Auto Show last November. The domestic companies say that this time they want local investment that includes technology transfer, so the Western carmakers that do decide to get in will find tougher negotiators than before. Peugeot, for instance, had a 51-49 partnership with Iran Khodro before pulling out; the new agreement is a 50-50 venture. As a 'gift' to the world for a final deal that encourages global investment, Bloomberg says that the price of crude would go down by $15 per barrel. News Source: Automotive News - sub. req.Image Credit: Atta Kenare/AFP/Getty Images Earnings/Financials Government/Legal Kia Peugeot Renault iran sanctions khodro