2015 Kia Sorento Lx on 2040-cars

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Hyundai, Kia looking to cut costs

Hyundai and Kia are off to roaring starts in the United States this year, underscored by Kia's best sales month ever in May. But globally the situation for the South Korean siblings hasn't been nearly so positive. Recently, they reported their fourth consecutive quarter of decreasing operating profits worldwide, and now they're "making efforts to cut costs," according to a statement in a joint email obtained by Bloomberg. However, the companies aren't detailing where they would make the cuts or how much they want to save. The amount could be significant, though. An unnamed Hyundai senior executive reportedly told a South Korean newspaper that the business might be aiming for up to 30 percent in reductions. According to Bloomberg, Hyundai and Kia are facing falling total sales worldwide. Making the situation worse is that the strong Korean won versus the weaker Japanese yen gives competitors an advantage. The automakers also angered investors enough last year to prompt a stock buyback after paying $10 billion for the land for a future headquarters. The prognosis doesn't look utterly dire, though, and new products are on the way. For example, the Hyundai Santa Fe is being refreshed in South Korea, and the next-gen Elantra debuts at this year's Los Angeles Auto Show. There's also the Creta on the way for foreign markets. Additionally, several models are still awaiting the green light, including a Hyundai Genesis-based luxury crossover, a compact CUV, and the Santa Cruz unibody pickup. Meanwhile, the Kia GT is reportedly close to production, too. Related Video:

2015 Kia Soul EV Prototype

Spend a few days chatting with the good people of Seoul about their neighbors to the north, and you'll find a pattern emerges. When they first start talking, South Korea's citizenry speaks openly and ardently about seeking reunification with their North Korean brothers and sisters. Yet once you get beyond casual conversation, you'll find that those hopes and wishes aren't all that they first appear to be. Quite reasonably - and despite everyone's best intentions - there's genuine fear that opening the border with communist North Korea would severely tax South Korea's finances, infrastructure and daily lives. It's almost as if reunification feels like something the general public has to say they want, even if they're really not buying into the reality.
It's kind of like the way American consumers and the media have been crying out for electric and hybrid automobiles, yet when it comes time to vote with their pocketbooks, their hearts just aren't in it. There are potential financial and infrastructure concerns, along with lingering worries about how well EVs will integrate into their daily lives. Today, hybrids and plug-ins make up about three percent of new vehicle sales, and the vast majority of those models are gas-electric models - one in particular. Pure electrics aren't yet even a drop in a very large bucket. It's exactly this uncomfortable dichotomy that rings in our heads as we drive through the traffic in Namyang at the wheel of a 2015 Kia Soul EV prototype.
Of course, one can't blame Kia for developing an electric car - it has California's zero-emissions mandates to meet, regardless of whether the segment's sales suggest there's a sound financial strategy attached. Kia officials we spoke with at this early drive of the company's electrified 'box' car seemed to tacitly acknowledge the Soul EV's difficult business case, but pointed to the company's effort to reduce its CO2 output as part of its reason for being. And besides, their beancounters' industry-wide projection for global EV sales in 2018 is 600,000 units, so there's got to be room to grow, right?

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.