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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.

Kia still said to be considering diesels in US

Is Kia making diesel rumors a biennial thing? The South Korean automaker once again may take a closer look at making an oil-burner available for US consumption, JustAuto says. All in the name of fuel economy, of course. Kia Motors America vice president Orth Hedrick tells JustAuto that the automaker may start selling diesels in the States during the next few years. Kia is getting ready to debut its Soul EV battery-electric in the US later this year, and with diesel powertrains gradually overcoming their perceptions of being slow and loud, the company may find a receptive audience in the US for these powerplants. The problem has always been the inconsistent emissions standards between Europe and the US, but that may be resolved by 2018, says Hedrick. Kia's obviously encouraged by rising diesel sales from German automakers such as Volkswagen and Audi, as well as the fact that it just completed a record-breaking six-month sales period for the US. Kia spokesman Scott McKee, in an email to AutoblogGreen, would only say that "identifying new opportunities for growth is part of our long-term strategy" but reiterated that no announcements have been made. Of course, there was a similar buzz during the spring of 2012, when reports surfaced that Kia would start making a diesel-powered Optima, which it provides to European customers.

Kia Soul getting turbocharged variant, say hamsters

Last week, we reported on the return of Kia's Soul-promoting hamster mascots. They took on "Dueling Banjos," and it was adorable and entertaining and everything we expect from our favorite spokesrodents. But that same spot also hinted at something strange on the end slide – a Soul Turbo, coming this winter. One Autoblog staffer said I must have been so overcome by the return of my favorite spokeshamsters that I missed the end slide the first time around, and that might be true. Instead of debating that, let's focus on just what Kia revealed here. The company has long hinted that a higher-performance Soul was in the works, embodied by the Track'ster and Trail'ster concepts from 2012 and 2015. Both cars used a version of Hyundai/Kia's 1.6-liter, turbocharged four-cylinder, tuned to 250 hp in the Track'ster and 185 hp in the Trail'ster, which had the added bonus of a hybrid assist. Both added all-wheel-drive systems to the front-drive Soul package. A production Soul Turbo will likely fall between the hot-hatchback-like Track'ster and the off-road-focused Trail'ster. Expect Kia to pluck the corporate 1.6-liter turbo four for duty, with anywhere from 175 to 201 hp – we can hope for more, but that power spread covers Hyundai/Kia's current production trims for this engine. All-wheel drive seems like a given, based on Hyundai's approach to the Tucson, Kia's past few concepts, and the Soul's positioning as a sub-compact CUV. We've reached out to Kia for confirmation that the Soul Turbo is coming. As soon as we hear back, we'll update this post. And if you need a refresher on the video, we've embedded it below. The text in question pops up at 1:46. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.