Hyundai launches new Genesis sports sedan in SUV-driven market

SEOUL - South Korea's Hyundai Motor Co will launch its first new sedan under the premium Genesis marque in Seoul on Friday, hoping to cement the brand's place in the luxury segment and make up for its lack of a strong SUV line-up.

US pop singer Gwen Stefani will perform for about 10,000 people at a gala event to launch of the G70, the third sedan to carry the Genesis name but the first to be marketed exclusively under Hyundai Motor's fledgling premium brand.

Starting from $33,000, the sporty four-door offers bang for the buck as it takes on rivals including affiliate Kia Motor's Stinger sedan and BMW's 3 series.

But analysts say the G70 will not solve Hyundai's troubles in the United States, where sports utility vehicles (SUVs) are all the rage and the two previous Genesis-branded sedans failed to take off.

"Look at Cadillac, with just one crossover, the brand is struggling in the US. It will be much the same story for Genesis until they can get a crossover to market," said Dave Sullivan, product analysis manager at US consultancy AutoPacific.

"It's not because the G70 will be a bad product ... The sedan lineup just doesn't match consumer demand."

The G70 debuts in South Korea on Friday followed by the United States next year. Hyundai has not said when it would enter China and Europe, which are dominated by German premium brands.

Hyundai's China sales tumbled more than 60 percent in the second quarter due to its lack of a strong SUV line-up and political tensions between China and South Korea over North Korea's nuclear weapons program.

In the United States, SUVs made up 35 percent of Hyundai's total US sales from January to August this year, far lower than the industry's 62 percent, according to US researcher Autodata.

CRITICAL TEST

The Genesis project is being closely watched by Hyundai Vice Chairman and heir apparent Chung Eui-sun, as he prepares to take over the world's No.5 auto group from his father, 79-year-old Chairman Chung Mong-koo.

As the first Genesis model which was not previously sold as a Hyundai, the G70 will be a key test of the two-year-old marque's ability to survive in a fiercely competitive field.

Its chief rival will be Hyundai affiliate Kia's slightly cheaper Stinger, which shares the same platform as the G70 and launched in late April. Other rivals include BMW's 3 series, Audi's A4 and Mercedes-Benz's C-class.

Hyundai has said the Genesis line-up will grow to six by 2020, with the addition of a sports coupe and two SUVs.

source: news.abs-cbn.com

Hyundai, Kia aim to grow 2017 sales to 8.25 million vehicles globally

SEOUL - Hyundai Motor Co. and affiliate Kia Motors said on Monday they aim to increase their combined sales to 8.25 million vehicles globally in 2017, despite rising competition.

The 2017 target is slightly higher than their 2016 goal of 8.13 million vehicles. The South Korean automakers' final sales figures for 2016 are due out later on Monday, with analysts expecting a miss due to weak demand in emerging markets.

"The 2017 goal is slightly higher than my projection," said Ko Tae-bong, an auto analyst at Hi Investment & Securities, adding that the performance of new models would be the key to success after some disappointments in recent years.

With emerging markets such as Russia stabilizing, and with Hyundai and Kia Motors gearing up to boost vehicle supply to the United States and China, sales could get a lift this year.

But Hyundai Motor and Kia Motors - which together rank fifth in global sales - plan to add capacity in China and Mexico this year, just as those markets and the United States are seen slowing, likely pressuring margins.

"With the global economy continuing its low growth, trade protectionism spreading and competition intensifying in the automobile industry, uncertainty is growing more than ever," Hyundai Motor Group Chairman Chung Mong-koo said in his New Year message to employees.

Hyundai Motor likely clocked its fourth straight annual profit decline last year, hurt by its higher exposure to weak emerging markets, and a product line-up that features more sedans than sport utility vehicles, just as SUVs have become more popular across many global markets.

Hyundai Motor is targeting 2017 global sales of 5.08 million vehicles, while Kia Motors set its goal at 3.17 million vehicles.

Kia Motors Vice Chairman Hank Lee told employees on Monday that the automaker hoped to revive growth this year, after falling short of its 2016 sales target.

Hyundai Motor shares were flat in a wider market .KS11 that was down 0.4 percent in early morning trade, while Kia Motors shares were down 0.3 percent

Hyundai Motor shares fell for a third straight year in 2016, down 2 percent versus the wider market's 3 percent gain. Kia Motors shares slumped 25 percent last year, making them the worst-performing stock among major car makers in the world.

source: news.abs-cbn.com

Hyundai 'extremely concerned' by FIFA bribery scandal

SEOUL -- Major FIFA corporate sponsor Hyundai Motor said Friday it was "extremely concerned" by the corruption scandal engulfing world football's governing body and was following events "closely."

The South Korean carmaker, which with affiliate Kia Motors makes up the world's fifth largest auto group, signed up in 2010 to become FIFA's official automotive partner until 2022.

Hyundai-Kia is a presenting sponsor for the 2018 World Cup tournament in Russia, along with the likes of Adidas, Coca-Cola, Visa, Budweiser and McDonald's.

But after seven FIFA officials were arrested in Switzerland for bribery, Hyundai and Kia released identical statements that suggested a review of the sponsorship deal.

"As a company that places the highest priority on ethical standards and transparency, Hyundai Motor is extremely concerned about the legal proceedings being taken against FIFA executives and will continue to monitor the situation closely," the Hyundai statement said.

The arrests came as part of a US Justice Department case that named nine officials of football's governing body, and five sports marketing officials, in a number of instances of bribes and kickbacks involving sponsorships over the past two decades.

source: www.abs-cbnnews.com

Hyundai, Kia to pay record fine in US for overstating mileage

WASHINGTON/DETROIT - Korean carmakers Hyundai Motor Co and affiliate Kia Motors Corp will pay $350 million in penalties to the U.S. government for overstating fuel economy ratings in what officials said on Monday was the biggest settlement of its kind.

The deal comes on top of $395 million the automakers agreed to pay last December to resolve claims from the owners of the vehicles, bringing the companies' total cost for the mileage overstatements to more than $700 million.

Monday's settlement with the U.S. Environmental Protection Agency, the U.S. Department of Justice and the California Air Resources Board resolves an investigation of the South Korean carmakers' 2012 fuel economy ratings.

The penalties were the largest ever under the Clean Air Act.

"This will send an important message to automakers around the world that they must comply with the law," said Attorney General Eric Holder.

Under the accord, which involved the sale of 1.2 million cars and SUVs, the South Korean car firms will pay a $100 million penalty, spend around $50 million to prevent future violations and forfeit emissions credits estimated to be worth more than $200 million.

The greenhouse gas emissions that the forfeited credits would have allowed are equal to the emissions from powering more than 433,000 homes for a year, the EPA said.

"Businesses that play by the rules shouldn't have to compete with those breaking the law," said EPA Administrator Gina McCarthy.

McCarthy said Hyundai and Kia had committed the most egregious violation of the reporting standards. She declined to say whether other violators may also be fined.

"Every automaker will be looking carefully at its current testing procedure to avoid a similar penalty in the future," said Karl Brauer, senior analyst at Kelley Blue Book's KBB.com, who noted "frustration in the gray area between automakers' stated MPG numbers and the real-world results experienced by car owners".

In November 2012, Hyundai and Kia conceded they overstated fuel economy by at least a mile per gallon on vehicles after the EPA found errors for 13 Hyundai and Kia models from the 2011 to 2013 model years. Hyundai said at the time that the affected cars' reported fuel economy would be adjusted by 1 to 2 miles per gallon.

Hyundai Motor shares fell as much as 4.4 percent in Seoul trading on Tuesday, extending a slide that has dragged them to their lowest in over four years.

The decline knocked Hyundai from its perch as South Korea's second-most valuable company after Samsung Electronics Co Ltd , according to exchange data on common shares, a spot it had held since March 29, 2011.

Hyundai and Kia both increased their shares of the U.S. new-vehicle market in the past decade, particularly during the economic downturn of 2008 to 2010 when consumers craved fuel-efficient and relatively low-priced vehicles.

However, Hyundai has lost U.S. market share in the past couple of years, as U.S. and Japanese rivals made a comeback.

Hyundai said on Monday that its U.S. vehicle sales fell 7 percent in October from a year earlier, lagging the market's 6 percent gain, with weaker sales of the Sonata sedan offsetting demand for its Santa Fe sport utility vehicles. Kia's U.S. shipments rose 12 percent in October.

"We are pleased to put this behind us," said Hyundai U.S. chief David Zuchowski. The company added that it believes its process for testing vehicle fuel economy meets U.S. guidelines, and the overstatement was a result of a data processing error.

Hyundai's U.S. chief at the time, John Krafcik, stepped down after his contract expired at the end of 2013.

Kia in a statement said its priority "remains making things right for our customers through our fair and transparent reimbursement program".

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