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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.

S. Korea to raise concerns about EV credits, battery sourcing in U.S. visit

SEOUL — South Korean officials will meet U.S. counterparts this week to express "concerns" about the Inflation Reduction Act, which restricts who can receive U.S. subsidies for the production of electric vehicles and where firms can source battery materials. President Joe Biden signed into law this month a $430 billion bill, seen as the biggest climate package in U.S. history. The law requires that EVs be assembled in North America to qualify for tax credits, ending subsidies for several EV models, and that a percentage of critical minerals used in batteries come from the United States or an American free-trade partner. Automakers like Hyundai Motor face short-term competitive disadvantage to manufacturers of EVs that receive tax credits in the United States, while industry sources said Korean battery makers must make changes to mineral sourcing routes, which could affect cost adversely. South Korean officials are expected to tell counterparts from the U.S. Trade Representative's office and the U.S. Treasury that the new law may violate trade norms such as the U.S.-South Korea free trade agreement and the WTO agreement, the industry ministry said. Korean automakers will consider adjusting production plans to prioritize the construction of U.S. plants for example, the ministry said, while battery makers will seek to diversify where they source minerals from. Under new rules to kick in next year, at least 40% of the monetary value of the critical minerals in batteries will need to come from the United States or an American free-trade partner, with that proportion rising to 80% by 2027. Globally, the treatment of some 58% of lithium, 64% of cobalt and 70% of graphite goes through China, according to ministry data. FALLOUT The new rules are a major complication for battery makers LG Energy Solution (LGES), SK On and Samsung SDI, battery industry sources said. South Korea's LGES supplies Tesla and General Motors, while SK On and Samsung SDI supply Ford Motor and Volkswagen among others. The three battery makers together command more than a quarter of the global EV battery market, according to SNE Research. "It's become a huge headache ... Automaker clients said they didn't expect this new law would take effect this soon," said a South Korean battery industry source.

2021 Kia Seltos officially costs $23,110; trim features detailed

Kia has broadcast the Seltos' arrival in a Super Bowl commercial, but the South Korean automaker has done its usual stealth reveal of pricing, quietly uploading trims and MSRPs to the build site. Turns out the prices leaked to Motor1 last month are all correct. Including the $1,120 destination and handling charge, here are the Seltos trim steps and prices: LX AWD $23,110 S FWD $23,110 S AWD $24,610 EX AWD $26,410 S Turbo $26,610 SX Turbo $29,010 The base LX packs a 2.0-liter four-cylinder with 146 horsepower and 132 pound-feet of torque running power through a CVT to all four wheels. EPA-rated mileage comes in at 27 city, 31 highway, 29 combined. Standard features include keyless entry, 8-inch touchscreen-based infotainment with Android Auto and Apple CarPlay, and 17-inch wheels. The S, with the same engine but front-wheel drive, ups gas mileage to 34 highway, 29 city, and 31 combined. Features get a boost, too, with a different grille and LED DRLs and taillights, mixed Sofino leatherette and cloth surfaces, a leather-wrapped steering wheel and gear shift, roof rails, and heated outside mirrors. Standard driver safety kit bundles automatic emergency braking, lane keep assist, and lane departure warning. Blind spot detection is an optional extra. Requesting all-wheel drive with the center-locking differential costs $1,500. The EX comes with AWD, as well as all of the S features plus full Sofino leatherette seats, heated front seats and a power driver's seat, keyless entry, push-button and remote start, climate control, power sunroof, wireless phone charging, and a USB port for rear passengers, and upgraded 17-inch wheels. Safety tech includes blind spot detection, rear cross traffic alert and avoidance. The S Turbo is based off the S trim but fits the a 1.6-liter with 175 hp and 195 lb-ft that shifts through a seven-speed dual-clutch gearbox and only comes in AWD. The $3,500 premium over the S pays for the AWD, the superior engine, and much of the feature set from the EX trim except the seats; the S Turbo sticks with the synthetic leather and cloth seating. The top-tier SX Turbo goes beyond the S Turbo with LED headlights and fog lights, full Sofino leatherette, a 10.25-inch infotainment touchscreen, Bose premium audio and "Sound Connected Mood Lamp, an auto-dimming rearview mirror, and Safe Exit Assist. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.