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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.

Kia Sportage MSRP up by almost 14 percent for 2014, starting at $21,600*

When Kia introduced the updated 2014 Sportage back in September, one of the biggest things that stood out to us was that the base model was dropped. Not only did this mean the Sportage would no longer be offered with a manual gearbox, but we also expected a price increase to follow. We were right.
The entry-level trim for the 2014 Sportage is now the LX, which starts at $21,600 (not including $850 for destination). This is only a $400 increase over the 2013 Sportage LX, but it represents a $2,600 jump (13.6 percent) in the Sportage's starting price point. At this new price, the Sportage is now priced higher than the Mazda CX-5, Hyundai Tucson and Mitsubishi Outlander Sport and lower than many other compact crossovers like the Ford Escape, Chevy Equinox, Nissan Rogue, Jeep Cherokee and Toyota RAV4. Pricing for the 2014 Sportage EX has increased by $800, starting at $25,000, while the sportier, turbocharged Sportage SX holds steady at $26,900.
In addition to other minor changes like slightly refreshed exterior styling, a sportier suspension setup for the LX trim level and more available cabin tech, the other key update made to the 2014 Sportage is the addition of direct injection to the base 2.4-liter four-cylinder engine. This brings a slight bump in power output (from 176 horsepower and 168 pound-feet of torque in 2013 to 182 hp and 178 lb-ft for 2014), but, for some reason unknown to us, it dings fuel economy. With ratings of 21 miles per gallon in the city and 28 mpg on the highway, the front-wheel-drive Sportage loses 2 mpg for the highway rating compared to 2013, while the all-wheel-drive model's 19 mpg city and 26 mpg highway is a drop of 1 mpg for both figures.

Kia calls reports of second US plant 'groundless'

In discussing how Kia planned to use a focus on quality to raise its brand perception and take the fight to BMW and Audi instead of Toyota, a recent article in Automotive News Europe said one of the primary constraints was production capacity; Kia simply doesn't have the ability to make enough cars to meet its aims with the plants it has.
The CEO of Hyundai-Kia is said to be reluctant to build more plants because of that focus on quality and the fact that its suppliers are stretched to the limit. The effects of that position are being felt right now with both makers losing market share, as in the case of Hyundai not being able to make enough of its Veloster Turbo for the US market.
A South Korean newspaper apparently reported last week that Kia was planning to build a second factory in Georgia with capacity for up to 150,000 units annually, and that the company would break ground as soon as this month on "KMMG2." Kia has responded to the news by saying, "The report is all groundless." The mayor of West Point, site of the current KMMG plant, said he didn't know anything about such plans, nor did the Georgia department of economic development have knowledge of a new Kia factory.