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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.

2014 Kia Optima Hybrid shows its freshened face

Think back to the 2013 New York Auto Show, and you'll recall that the already attractive Kia Optima midsize sedan was re-schnozzed for the 2014 model year. The hybrid version was left alone, visually, though its powertrain was updated to provide more oomph and slightly better fuel economy. And now, the whole thing comes full circle - the fresh-faced 2014 Optima Hybrid is making its debut here at the Chicago Auto Show.
The new look is really the only news here, with a reworked front fascia that combines restyled Hybrid-specific LED lighting elements and new enhancements that Kia says improves aerodynamics. A similar touch-up has been given to the rear end, and new 16- and 17-inch wheel designs are also available.
Under the hood, the Optima Hybrid's powertrain is unchanged, the four-cylinder gasoline-electric system still putting out a combined 199 horsepower and 235 pound-feet of torque. Fuel economy is also unchanged for 2014, with the LX model estimated to achieve 36/40/38 miles per gallon (city/highway/combined), and the higher-grade EX estimated to net 35/39/37 mpg.

New Kia Soul Turbo gets futuristic full-width headlight treatment

When we last saw a prototype of the next-generation Kia Soul, it looked like it wouldn't look all that different from the old one, except for having trendy split headlights. As it turns out, those split headlights are more interesting than we thought. The example of the new compact hatchback shown above reveals that it will have a futuristic-looking full-width headlight treatment, something we haven't really seen since the early Mercury Sable. It's clear from these photos that the full-width lights are not the actual headlights that provide forward illumination. They're just accent lights, but the effect is still impressive. It appears the turn signals are integrated into each end of the big light. The center section also eliminates the old Soul's center grille. Below the lighting unit is an expanded lower grille and large lighting elements on either side. These are real forward-illuminating lights. In the bottom of the lower grille are a pair of foglights much like on the current model. The Soul's profile looks almost unchanged from the current model, leading us to wonder if this is a major update to the existing car, or if it is a new platform that just looks mostly like the old one. The tail end receives some major changes, though. The taillights are now almost completely visible, and although they still run up the rear pillars, they now descend lower and into the hatch area. They appear much more shapely and aren't form fitted to the body. This particular prototype also has a sporty dual exhaust tip in the center. This seems to indicate this is a Kia Soul Turbo model, as does the fact it's parked next to a Hyundai Veloster N. Not much is known about the new Kia Soul. We expect it to be roughly the same size as the current model, and we wouldn't be surprised if Kia offers all-wheel drive to keep it competitive with other tiny crossovers. As for the Kia Soul Turbo, we predict it will use the same turbocharged 1.6-liter four-cylinder that the current model and the new Hyundai Veloster Turbo use. We do hope that Kia will offer it with a manual transmission this time around. Related Video: