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Hyundai boosted production in March, so now its cars sit in U.S. ports

SEOUL — As Detroit's automakers shut production in March due to the coronavirus pandemic, South Korea's Hyundai cranked up its factories back home to ship cars to the United States, a move that is proving costly for the world's fifth-largest auto group. Hyundai ramped up domestic production to as much as 98% of capacity by late March, not only as the Korean market was recovering from a bad February but also because it bet on demand for Tucson SUVs and other models from U.S. customers, its biggest overseas market outside of China. While Hyundai is one of few global automakers whose production has recovered at home, its exports optimism has been dampened by the severity of the U.S. outbreak, weak consumer sentiment and as rivals have quickly moved to guard their turf. Consignments of cars shipped from South Korea are now sitting in U.S. ports, with dealers slow to take deliveries because of slumping sales and rising inventory, four people with knowledge of the matter told Reuters. The company idled a Tucson production line at home last week for five days, while sister firm Kia is looking to suspend three Korean plants for a week. And analysts now expect a sharp drop in first-quarter operating profit when it reports results on Thursday and some even forecast a second-quarter loss. "I hope that the situation will recover by the middle of next month. If not, we might have to lay off some people," said Brad Cannon, general manager of an exclusive Hyundai dealership in California, whose sales are down more than 50% from when the pandemic started. Hyundai runs a factory in Alabama — which is closed until May 1 — but imports are key to meet U.S. demand. Only about half of its vehicles sold in the United States are made in North America compared to between 68% and 85% for Japanese rivals Toyota, Nissan and Honda, who have also suspended production there till May. The South Korean company makes about 61% of its cars overseas, up from 48% a decade ago. That leaves it vulnerable to overseas factory shutdowns and shrinking demand outside of its home market. Hyundai's South Korean factory operation, which had recovered from a component shortage from China to nearly 100% capacity by March, could fall to as much as 70% in April, the company recently told analysts. "We will continue to monitor the situation and take appropriate action promptly," Hyundai said in an emailed statement. Minimizing the impact For its part, Hyundai has taken measures to minimize the impact.

Hyundai-Kia fuel-economy errors trigger $300M in federal penalties [w/video]

This amount includes $100-million in civil penalties, the largest such fines in EPA history.
Hyundai and Kia are getting more than a slap on the wrist for overstating the fuel economy of an estimated 1.2-million vehicles in their 2011-2013 model ranges. The Environmental Protection Agency, the Department of Justice and the California Air Resources Board are hitting the automakers with collective penalties valued at around $300 million for Clean Air Act violations. This amount includes $100-million in civil penalties, the largest such fines in EPA history. Specifically, Hyundai is paying a $56.8 million penalty and relinquishing 2.7-million greenhouse gas emissions credits. Kia is paying $43.2 million in penalties and giving up 2.05-million credits.

Next Hyundai Santa Fe carries Kona cues

Last week we showed you Hyundai's newest and smallest crossover, the Kona. This week, we bring you the newest version of Hyundai's largest crossover, the Santa Fe, albeit beneath much camouflage. There's a bigger connection between these two vehicles than just timing and size contrast, though. They appear to share some styling cues. We can see through the vinyl draperies on the nose and tell that it has an aggressive version of the Hyundai cascading grille, much like the Kona. It also has the slender top headlight element combined with larger, separate elements lower in the fascia, again like the little crossover. The camouflage also fits closely enough to the body to reveal that the main grille will be flanked by large vents that encompass the lower headlamps. We also see some Recaro racing seats through the windshield, but we doubt those will make production. Prove us wrong, Hyundai! Moving to the sides and tail, there are fewer details to discern. The size looks similar to the current model, and the roofline and window lines also look similar. The rear taillights do look slimmer than those on the present Santa Fe. As for when we may see this updated Santa Fe, we wouldn't expect a reveal until next spring at the earliest, possibly next fall, as a 2019 model. The reason for this is primarily the fact that the current Santa Fe was just refreshed for 2017, so Hyundai will likely give that update a little bit of breathing room. Related Video: Featured Gallery 2019 Hyundai Santa Fe Spy Shots View 10 Photos Image Credit: CarPix Spy Photos Hyundai Crossover Economy Cars hyundai santa fe