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Weekly Recap: Kia leads Korea's quality surge

The rapid rise of Korea's auto brands in the US market has been apparent on the sales charts for several years, and now it's showing up in an area that's just as crucial: quality. Kia and Hyundai earned the highest rankings among mainstream brands in the J. D. Power Initial Quality Study released on Wednesday. The study tracks problems owners report during the first 90 days they own their car. Kia reported 86 problems per 100 vehicles, or fewer than one problem per car sold, to take second in the rankings behind luxury sportscar-maker Porsche (80). Kia's score improved by nearly 20 percent compared with the 2014 study. "The big industry story is Kia," Renee Stephens, vice president of U.S. automotive quality at J.D. Power, said in a video statement, noting Kia's infotainment systems were the key reason for its improved performance. Hyundai was fourth for the second straight year, though its score actually worsened by one, to 95. Even with Hyundai's slight dip, Korean quality increased 11 percent, according to the study, which far outpaced American and European companies' three-percent increases. Japanese brands improved one percent. Hyundai Motor Co. (parent company of the Hyundai and Kia brands) captured four individual vehicle awards, which tied for the most with General Motors, Nissan, and Volkswagen. "The Korean brands have really taken off," Stephens said. "There's movement in the industry, and the patterns are shifting." Another luxury brand, Jaguar (93 problems), slotted in between Hyundai and Kia in third place. Infiniti was fifth, followed by BMW. Chevrolet was the highest domestic brand, taking seventh place, followed by Lincoln, Lexus, and Toyota, which were all well above the industry average of 112 problems per 100 vehicles. OTHER NEWS & NOTES Kirk Kerkorian dead at 98 Kirk Kerkorian, a billionaire activist investor who wielded enormous influence on the Detroit Three car companies in the 1990s and 2000s, died Monday. He was 98 years old. Kerkorian made headlines in 1995 for trying to take over Chrysler – with the help of former chairman Lee Iacocca – before being fended off by Chrysler management. His takeover attempt ultimately pushed Chrysler to be sold to German giant Daimler. He tried to buy Chrysler again in 2007 when Daimler put Chrysler on the market, but Kerkorian fell short and the automaker was sold to private equity firm Cerberus.

Kia recalls 2014 Cadenza over wheel fractures

Kia is officially recalling just over 3,100 2014 Cadenza sedans. While that might not seem like a lot of vehicles, the reason for the recall is particularly troubling - the optional 19-inch wheels on these cars are prone to cracking. Doubly troubling? Cold weather tends to make things worse, so if you drove your new Cadenza during this past Winter of Hell, you'll want to get on the horn with your local dealer.
The affected cars, all of which have 19-inch wheels, were built between February 1, 2013 and August 27, 2013. Kia is in the process of notifying owners, and should be completed by the end of the month. Based on the recall documents, it doesn't appear that there have been any injuries or crashes due to the wheel fractures.
Owners will need to report to dealers, where their cars will be fitted with replacement wheels, free of charge. Scroll down for the official bulletin from the National Highway Traffic Safety Administration.

Why BMWs are cheaper than Hyundais in Korea

Bloomberg reports shifting tariff regulations have upended the traditional automotive pecking order in Korea. Thanks to cheaper import taxes, foreign brands have seen market share jump from 28 percent to 41 percent over the last two years. BMW, Mercedes-Benz and Audi have all capitalized on the shift, with domestics like Hyundai and Kia suffering at the hands of their German rivals.
Taxes on European imports have fallen from 8 percent in 2011 to just 3.2 percent today. Over the next few years, tariffs will all but be eliminated for most imports, and taxes on US-made vehicles are expected to fall to just 4 percent in 2014. By 2016, that number will be zero. Needless to say, Hyundai and Kia are concerned about the shift.
Hyundai has seen profit fall by 15 percent last quarter, and the company says it is on pace to see the slowest sales growth since 2007. The company's shares have fallen by 12 percent. In order to stem the losses, Hyundai has discounted its midsize sedans and started working on diesel engine options.