The Truth About Cars » Korea The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 14:03:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Korea Hyundai’s New Large Sedan – Not For Us Thu, 29 May 2014 15:38:48 +0000 2015-hyundai-grandeur-azera


Along with an updated version of the Grandeur (aka the Azera), Hyundai has revealed the new “AG” large sedan, which will be a flagship, but also slot below the Genesis and above the Grandeur.

Technical specifications are unknown, but one thing is for certain: the AG will not be coming to North America. Hyundai is apparently feeling the pinch from “import” brands in its home market of South Korea, and the AG is meant to be a response to growing sales from non-domestic brands.

According to Automotive News, free trade agreements have sent import sales skyrocketing, with German brands providing intense competition to local players. Overall, imports make up as much as 13 percent of South Korea’s car market, which was closed until 1987.

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2015 Hyundai Sonata Revealed Mon, 24 Mar 2014 03:05:29 +0000 2015-hyundai-sonata4


Hyundai unveiled the Korean market Sonata in Seoul, while the North American spec version gets its debut in New York next month.

The 2015 Sonata uses 30 percent more advanced high-strength steel features the kind of tech that is proliferating in the mid-size segment: Advanced Smart Cruise Control, blind spot and lane departure systems, a hands-free trunk, and knee airbags. The new car is nearly 1.4 inches longer and 1.2 inches wider.

We’ll likely see a 2.4-liter GDi  with 190 hp, 182 lb-ft of torque as well as a 2.0T powertrain. A Sport model (like the Chrysler 200S and Honda Accord Sport) is also coming. Transmission options include a six-speed manual and six-speed automatic.

2015-Hyundai-Sonata-cabin 2015-Hyundai-Sonata-front-view 2015-Hyundai-Sonata-interior 2015-Hyundai-Sonata-motion 2015-Hyundai-Sonata-rear-red 2015-Hyundai-Sonata-rear-view 2015-Hyundai-Sonata-side-view 2015-Hyundai-Sonata-silver 2015-Hyundai-Sonata-suspension-brakes Sonata in motion ]]> 43
Junkyard Find: 2001 Hyundai XG300 Tue, 11 Feb 2014 14:00:27 +0000 14 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee MartinI admit I’ve got a sick fascination with luxury cars sold by companies not (at the time, in this market) known for luxury. There’s the Mitsubishi Diamante, of course, and the Mazda 929, and even the Volvo 262C Bertone (I’m still looking for a junked Daewoo Leganza, but either they don’t exist or— more likely— they fade into the junkyard background so perfectly that I never notice them). The Hyundai XG, well, that’s a perfect example of the “who’s laughing now?” phenomenon; just a decade ago, we all chortled at the idea of a Korean luxury sedan selling in the United States. Today, German and Japanese car-industry execs wake up screaming from Hyundai-themed nightmares. So, that makes today’s Junkyard Find of great historical significance (to me and maybe a dozen others).
17 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee MartinThe XG was a Hyundai Grandeur, which started life as a rebadged Mitsubishi Debonair but had become an all-Hyundai machine by the time of the XG. Not a bad-looking car at all, but American car shoppers didn’t have a good reason to buy it.

Perhaps some Korean-style TV ads might have boosted sales on this side of the Pacific.

It would have been hard to replicate the macho-yet-restrained voiceovers that make Korean car ads so great, though.
07 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee MartinPlus, there was the fact that you could buy an Infiniti or Lexus with a V8 and rear-wheel-drive, or even a Cadillac with a front-drive V8. The 189-horse Sigma V6 failed to impress American car shoppers.
03 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee MartinI’ve never been inside a moving XG, but Hyundai was building pretty good cars by the dawn of the current century (in amazingly stark contrast to the car that made the Yugo GV seem reliable barely a decade earlier) and I’ll bet these cars were very comfortable and held together well for the price.
05 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee MartinHow much? The MSRP on the base XG300 was $23,499 (about 31 grand in 2013 bucks), which was less than half that of the $48,895 Infiniti Q45. Sure, a fairer comparison would be with the Camry-based, front-wheel-drive/V6-powered Lexus ES300… which had a $31,505 price tag in 2001.
01 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee MartinYou’ll find one in every car, kid. You’ll see.

01 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 02 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 03 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 04 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 05 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 06 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 07 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 08 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 09 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 10 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 11 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 12 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 13 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 14 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 15 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 16 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin 17 - 2001 Hyundai XG300 Down On the Junkyard - Picture courtesy of Murilee Martin ]]> 71
Canadian Automakers Make Last Minute Lobbying Effort to Delay Korean Trade Deal Fri, 17 Jan 2014 17:20:54 +0000 southkorea-02

Imported vehicle sales by country. Source: Canadian Vehicle Manufacturers Association

Companies building cars in Canada are lobbying at the last minute to, kill an “imminent” free trade deal between Canada and South Korea that the automakers say would damage the Canadian auto industry and the greater Canadian economy. Ford Motor Co. of Canada Ltd. president and chief executive, Dianne Craig, said on Thursday that the U.S.-Korea trade agreement enacted in 2007 has been a “disaster” for auto makers. Craig urged the Conservative government not to make the same mistake as the United States.

“We understand that [the Canadian government] need[s] to look for what’s in the best interests of Canada,” Ms. Craig said in an interview with Toronto’s Globe & Mail. “But, frankly, autos are the greatest driver of GDP and we think we need to have a pretty strong voice in this conversation. This is not good for autos, which means it’s not good for the economy, which means it’s not good for Canadians.”

According to Ms. Craig, Canadian officials told Ford and other Canadian car companies in December that the free trade agreement with South Korea was “imminent.” Without getting into details, Craig said that the deal currently on the table is worse than what the United States got in 2007, but that the automaker is continuing discussions with the government on the issue.

The fierce opposition from Ford and other automakers has apparently resulted in Ottawa applying the brakes and at least temporarily delaying the agreement. Canadian federal officials won’t comment other than saying that  the government hasn’t yet taken a final position.

Prime Minister Stephen Harper said last week that he “hopes” Canada and South Korea will reach a deal shortly, though he acknowledged the agreement might fall through.

Ford’s position is that instead of a bilateral agreement with Korea, Canada would be better off working through the  current Trans-Pacific Partnership to make South Korea make its markets more open to imports including cars, and end currency manipulation. Canada is one of the twelve Trans-Pacific Partnership negotiating partners. South Korea has expressed interest in joining the TPP and like the other 11 members, including the U.S., Canada has veto power over new members. That gives Canada some leverage beyond the bilateral talks.

Canada had a $2.7 billion (Canadian dollars) trade deficit with South Korea in 2012, and motor vehicles represented more than 80% of that. That year Canada imported 131,174 Korean-made vehicles in 2012 versus exporting fewer than 3,000 Canadian built vehicles to South Korea.

Bringing up the U.S.-South Korea trade deal, Craig pointed out that under that agreement by next year U.S. tariffs on Korean cars will have been eliminated, but that continuing non-tariff barriers have kept American and European automakers from gaining market share in South Korea despite the free trade deal.

“To us, they are not a good fair trade partner and they have proven that in the last two agreements,” Craig said. “That is our concern for Canada. All you have to do is look at the data and it speaks volumes.”

Some Canadians have said that the trade agreement and car imports from Korea just might have to be the price the auto industry has to pay in exchange for the billions of dollars in government assistance to that industry in recent years. Ford itself received a $71.6 million loan from the Canadian government just last year to help pay for some retooling at Ford’s Oakville, Ontario assembly facility. Craig rejected that connection.

“There are many components that go into manufacturing competitiveness in Canada,” she said. “There is a lot the government has done to support our industry. But frankly this [Korea-Canada] agreement would set automotive manufacturing back in Canada.”

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Salaried GM Korea Workers Offered “Voluntary Retirement” Ahead of Chevy Pullout from Europe Wed, 18 Dec 2013 11:30:09 +0000 GM Korea design center

GM Korea design center


Now that General Motors is withdrawing the Chevrolet brand from the European market, it plans to reduce salaried employee rolls at GM Korea, which has been assembling most of the Chevy branded vehicles sold in Europe. Reuters reports that Sergio Rocha, GM Korea CEO, said that GM’s Korean subsidiary will offer a “voluntary retirement” plan to its 6,000 salaried workers, including research and design staff. Some of the product development responsibilities have already been shifted out of Korea, like the design of the current Chevy Cruze. The previous generation of the Cruze was designed in Korea. So far the reductions are aimed at salaried workers as Rocha said the company has no plans to eliminate production jobs.

“This is part of our ongoing efforts to enhance operating efficiency,” GM Korea spokesman Park Hae-ho, said.

Earlier this month GM had announced that it was shuttering the Chevrolet brand in Europe by the end of 2015, focusing on restoring Opel and Vauxhall to profitability. Closing Chevy on the continent is expected to result in a 20% drop in production by GM Korea.

“Workloads are too light and there is a lot of anxiety about job restructuring,” a GM Korea R&D center employee told the Reuters news agency. The unidentified employee said that they are working on the next generation Spark subcompact, but after that job is completed next spring, there are no more projects in the pipeline.

“For me, this is the biggest crisis facing GM Korea since 2000″ the employee said. That was the year that Daewoo Motor went into receivership. GM bought the defunct company in 2002 and renamed it GM Korea.

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Review: 2013 Hyundai Elantra GT (Video) Fri, 02 Aug 2013 21:54:30 +0000 2013 Hyundai Elantra GT Exterior, Picture Courtesy of Alex L. Dykes

By pure happenstance I ended up with an Elantra GT immediately after reviewing the 2014 Kia Forte sedan. As I said last week in the Forte review, the Elantra and Forte are related, but this isn’t a case of Korean badge engineering. It’s far more complicated. The Forte is the new kid on the block while the Elantra has been around for a few years. At this stage in life, Hyundai is trying to inject vitality into the Elantra name by adding new models. First we got the four-door sedan, then a two-door coupé followed by the Veloster which is just a four-door hatchback Elantra (yes, I know Hyundai calls it a three-door, but I know better). If you’re confused by door counts, the new Elantra GT is a five-door. Say what?

About “them doors.”  We all know a sedan is a four-door because a trunk isn’t a door. (Despite our exclusive Trunk Comfort Index testing.) Likewise we call the Elantra Coupe a two-door but toss a hatch into the mix and, hey-presto, your cargo portal is a door. How does the Veloster fit in? It has three regular doors (two on one side, one on the other) and a hatch. Thankfully Hyundai killed off the awkward looking Elantra Touring wagon leaving nothing to go head to head with the Mazda3 hatch, Focus hatch and Golf. That’s where the GT fits in.

Click here to view the embedded video.


Adding the GT to the lineup puts Hyundai in the unusual position of having more variants of their compact vehicle than any other brand in the USA, and that’s even if you don’t count the Veloster as an Elantra. Part of this is to give customers options the other brands don’t, but it is also to extend the life of the aging Elantra. In 2010 when the Elantra splashed on the scene it was new and exciting, but this is a fiercely competitive segment. In the past three years, the Civic, Forte, Golf and Mazda3 have all been redesigned bringing new and exciting shapes to choose from. In this light the Elantra’s front end is starting to look a old to my eyes, especially when you park it next to the aggressive new Forte. Speaking of that elephant in the room, that 2014 Forte 5-door looks all kinds of hot.

Park the GT next to an Elantra sedan and you’ll notice this isn’t a sedan with a hatch glued on. Instead, the GT rides on a 2-inch shorter wheelbase shared with the Veloster. Along with the reduced wheelbase, Hyundai sliced nearly 9-inches off this sausage slotting the GT between the Veloster and Elantra sedan in overall size. The shorter dimensions made parking the GT easy in tight urban settings even though the GT retains the Elantra’s 34.8-foot turning circle. Despite the platform nip/tuck the GT is the heaviest Elantra variant at a still svelte (well, relatively speaking) 2,745lbs with the manual transmission.

2013 Hyundai Elantra GT Interior, Picture Courtesy of Alex L. Dykes


I took me a few moments to figure out what was going on with the GT’s interior. At first glance the dashboard and controls are familiar, yet this isn’t the same dashboard the Elantra coupé/sedan, or the Veloster. Gone is the “hourglass” center console in favor of a HVAC controls that are larger and easier to use. Our tester had the optional dual-zone climate control system which rearranges the buttons and adds a large blue-backlit display. Although the steering wheel has simply been tweaked with satin “metal” trim, the rest of the interior trappings are a notch above the Elantra sedan and coupe and, depending on where your fingers brush, a notch above the Veloster as well. This is fortunate because with even the Civic going up-market for 2013, the GT could have left the gates at a disadvantage. Thanks to the plastic upgrades, the GT is firmly “middle of the pack.”

Even though the GT is notably shorter and slightly taller than the sedan, folks up front won’t notice much difference. The seats are still supportive and comfortable, but not as easy on the back as the 2013 Civic. You might think the wheelbase reduction would play havoc with rear accommodations but the back seats have slightly more room than in the sedan. Some of that room is thanks to rear seats with a more upright and comfortable profile and some of it comes at the expense of the front seats which get a one inch reduction in travel for GT duty. Getting in and out of those rear seats is easy thanks to large and fairly square door openings. With 23 cubic feet of widget space behind the rear seats and 51 with the rear seats folded, the GT is the most practical Elantra since the dowdy Elantra Touring was mercy killed.

2013 Hyundai Elantra GT Interior, Infotainment, Navigation, Picture Courtesy of Alex L. Dykes


The GT may be new for 2013, but the technology is a few years old. Base shoppers may not mind the lack of progress because the standard 6-speaker audio system is one of the best standard audio systems in this segment. The 170 watt system comes with standard AM/FM/XM radio, a single-slot CD/MP3 player, Bluetooth speakerphone and USB/iPod integration. Sadly you won’t find SYNC-like voice command of your tunes or Pandora streaming, but the system has a natural sound and is easy to use.

High-rollers (like me) won’t be able to live without a touchscreen nav unit, but I was disappointed to find the GT doesn’t get the new 8-inch BlueLink system from the Santa Fe. Instead we find the 7-inch “last generation” system found in the regular Elantra. It’s not that the system is objectionable, it just lacks the snazzy new voice commands and smartphone integration ability you find in other Hyundai products. That new Kia Forte hatchback keeps popping in my mind because the 2014 Forte models get the latest Hyundai/Kia infotainment software with smartphone apps, 911 crash notification, vehicle diagnostics and full voice commands for your music library.

Hyundai Elantra GT 1.8L Engine, Picture Courtesy of Hyundai


Under the GT’s short hood beats the same 1.8L four-cylinder engine as the Elantra sedan. Unfortunately this mill doesn’t get Hyundai’s direct-injection sauce so power is rated at a middling 148 ponies and 131 lb-ft. In an interesting twist Hyundai allows you to select the 6-speed manual or the 6-speed automatic regardless of your trim level. This puts the Elantra a cog ahead of the Civic and a few other competitors. When you factor the additional weight of the GT model over the sedan it’s obvious performance is muted. When weight goes up, fuel economy goes down and so it is with the GT. The Elantra sedan scores a respectable 28/38/32 MPG (City/Highway/Combined) with the manual or automatic while the GT drops to 26/37/30 with the manual and 27/37/30 with the automatic. Our real world economy ended up a few steps lower at 28.2 MPG overall, notably lower than the Elantra sedan’s 32.1 MPG score last time I had one.

I spent most of the week inside the 6-speed automatic GT but I was able to hop in a manual equipped version for a few hours because I was intrigued by Hyundai’s decision to sell a row-your-own option on all trims. The automatic is obviously going to be the most popular option and will suit most drivers just fine. Hyundai has continually improved the feel of their slushbox and is now among the best in terms of shift feel and programming. While I like the feel of this 6-speed over Nissan’s CVT, 131 lb-ft would more easily motivate 2,800lbs if it was routed via a CVT. Just sayin… The 6-speed manual still lacks the refinement you’ll find in the VW Golf and the clutch feel is a notch below the Focus that’s a moot point if you want all the tech gadgets and a manual transmission in the same hatch. This is your only option.

2013 Hyundai Elantra GT Exterior, Picture COurtesy of Alex L. Dykes


The manual transmission is worth noting because the Elantra GT is much more of a driver’s car than any other Elantra, including the coupé. This is primarily because Hyundai significantly improved torsional rigidity when compared to its platform mates. Also tweaked were the springs and dampers for a tighter and more composed ride than its siblings. The changes are noticeable and make the sedan feel like a damp noodle in comparison. Hyundai seems to have found the right balance between sporty and soft when it comes to the ride with the GT feeling neither jarring nor marshmallowy soft. If road holding manners matter the most, the GT slots below certain Ford Focus models and VW’s Golf. On the rubber front we get 205/55R16 tires standard and an optional upgrade to 215/45R17s (as our tester was equipped) to improve grip. The larger rubber is part of the $950 “touch-and-go” package which nets you keyless-go, the larger wheels, aluminum pedals and a leather wrapped wheel and shift knob. Out on my favorite mountain highway the GT was a team player with more grip and composure than I expected. The steering? That’s another matter.

The Elantra GT gets Hyundai’s latest personalization option: adjustable steering assist. By pressing a button on the steering wheel you can select from three different steering effort settings on the fly. Yes, even mid-apex. Let’s get one thing clear: none of the modes will do anything to improve steering feel. In Comfort mode the GT is hopelessly over-boosted at speed but oddly doesn’t make give you feather-light steering in the parking lot. When in this mode it is all too easy to crank the wheel too far in a corner and end up constantly re-adjusting. Normal is a hair better. Sport is lifeless but firm. I spent my week in Sport.

2013 Hyundai Elantra GT Exterior, Picture Courtesy of Alex L. Dykes

I notice most reviews of the GT bemoan the “unusually loud” backup camera that pops out of the Hyundai logo on the trunk lid. Bucking the trend I don’t see a problem with this given the GT’s price tag of $18,545-$25,440. Similarly equipped the Ford Focus 5-door lands $1,800 more expensive and the VW Golf is $3,000lbs dearer. If however you factor in the Focus and Golf’s more powerful engines and better road manners, I’d call that difference much smaller. The smaller the delta becomes, the harder it is for me to look past the small things about the Elantra GT that bothered me during the week like the older infotainment software. If you can look beyond all of that, the 9.05 second 0-60 score is something you have to keep in mind because the Elantra GT is among the slowest hatches we have tested in a while.

Still, the GT is a cheaper option and that speaks to my budget-minded nature. But there are still two problems: the 2014 Kia Forte hatchback and the 2014 Mazda3 hatchback. The Forte’s newer underpinnings, more powerful engine, sexier sheetmetal and snazzier infotainment options are likely to be priced neck-and-neck with the Elantra GT. In addition to all that the Forte is likely to be the more engaging ride on the road based on our time with the Forte sedan. Then there’s that new Mazda3 with a two-engine lineup, available iLoop “almost hybrid” system, class leading 30/40MPG rating and a Mazda reputation for excellent road manners. Yes, those cars are still a few months off, but that just means the Elantra GT in the unfortunate position of being a value leader for a limited time only. What could Hyundai do to fix it? If they could jam their 270HP 2.0L turbo under the hood at a reasonable price…


Hyundai provided the vehicle, insurance and one tank of gas for this review.

Specifications as tested

0-30: 3.06 Seconds

0-60: 9.05 Seconds

1/4 Mile: 16.84 Seconds @ 81.7 MPH

Average Observed Fuel Economy: 28.2 over 549 miles


2013 Hyundai Elantra GT Exterior 2013 Hyundai Elantra GT Exterior, Picture Courtesy of Alex L. Dykes 2013 Hyundai Elantra GT Exterior, Picture COurtesy of Alex L. Dykes 2013 Hyundai Elantra GT Exterior-003 2013 Hyundai Elantra GT Exterior, Picture Courtesy of Alex L. Dykes 2013 Hyundai Elantra GT Exterior-005 2013 Hyundai Elantra GT Exterior-006 2013 Hyundai Elantra GT Exterior-007 2013 Hyundai Elantra GT Interior, Picture Courtesy of Alex L. Dykes 2013 Hyundai Elantra GT Interior-001 2013 Hyundai Elantra GT Interior-002 2013 Hyundai Elantra GT Interior-003 2013 Hyundai Elantra GT Interior-004 2013 Hyundai Elantra GT Interior-005 2013 Hyundai Elantra GT Interior-006 2013 Hyundai Elantra GT Interior, Infotainment, Navigation, Picture Courtesy of Alex L. Dykes 2013 Hyundai Elantra GT Interior-008 2013 Hyundai Elantra GT Interior-009 2013 Hyundai Elantra GT Interior-010 ]]> 52
GM Will Debut New Spark In 2015, Delays Aveo Launch Wed, 31 Jul 2013 11:30:05 +0000 17213029

Though General Motors has not commented, a spokesman for the Korean Metal Workers Union, which represents employees of GM Korea, said that the automaker plans to launch the next generation of the Chevrolet Spark in the first half of 2015 but that next Aveo (sold as the Sonic in the United States) will be delayed.


Choi Jong-hak said that the union has also been told that the company will continue to produce the two models in Korea, dispelling rumors that production would be moved, perhaps to the United States. After GM announced that the next Chevy Cruze would not be assembled in Korea, there were concerns about Aveo and Spark production, but GM Korea remains the Detroit based automaker’s major Asian manufacturing base as well as GM’s engineering and design center for its smallest cars.

“The management said it originally planned to launch the redesigned Aveo in late 2015, but the plan was pushed back. It also said it will produce the new Spark in the first half of 2015,” Choi said.

GM Korea currently exports the Spark and Aveo/Sonic to the United States, Europe and other countries. It also supplies knock-down kits for final assembly in Uzbekistan and elsewhere.

The Spark is assembled at GM’s plant in Changwon, and the Aveo is made at GM Korea’s headquarters in Bupyeong, near Seoul.

GM Korea built 215,177 Spark cars last year, with exports accounting for almost 70 percent of production.

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GM Lands A One-Two Punch As Mokka Moves To Spain Wed, 10 Jul 2013 17:00:35 +0000 Opel_Mokka_1.4_Turbo_ecoFLEX_Innovation_–_Frontansicht,_20._Oktober_2012,_Heiligenhaus (1)

Amid labor unrest in Korea, and a desire to utilize capacity in Europe, GM is moving production of the Opel Mokka (aka, the Buick Encore, and Canada’s Chevrolet Trax) out of Korea and into a facility in Zaragoza, Spain.

Zaragoza, which also builds the Corsa and Meriva, will assemble the Mokka using CKD kits (shipped from Korea) at first. An $80 million investment will be used to bring full production online, and will further secure the estimated 5,800 jobs at the plant.

The Mokka has been a hot seller for Opel, and a rare bright spot in a European car market that has otherwise been in the dumps. But the compact crossover segment that the Mokka competes in relies on low prices, and GM has increasingly come to view Korea as an expensive country to produce cars in.

Unfortunately, it’s bad news for GM’s Korean assembly arm. While the official party line is that the Mokka’s move will free up capacity at GM Daewoo’s assembly plant in Bupyeong for small SUVs like the Captiva, labor relations in Korea have been deteriorating for some time, and this is a way for GM to avoid having to deal with South Korean unions that are not afraid of striking and rioting to get their point across.

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GM Daewoo Workers Plan 4th Of July Walkout Thu, 27 Jun 2013 11:35:50 +0000 Korea Strike - Picture courtesy

Workers at GM’s South Korean plant will stage a partial walkout, ominously on Independence Day, July 4th, Reuters heard from a union spokesman. The walkout could turn into a full-fledged strike, union spokespeople said. Reports Reuters:

“Last week, 79 percent of union members at GM Korea voted in favor of strike action. Union leadership decided late on Wednesday to launch a partial strike for six hours on July 4, and to refuse overtime and weekend work for now, said Choi Jong-hak, a union spokesman. He said union leadership would decide whether to continue the partial strike depending on progress in the wage talks.”

This is yet another chapter in the suspense novel titled South Korean wage talks. Workers want more money, and they are upset that the next generation Cruze, and possibly the Mokka, will be produced elsewhere.

Four out of 10 Chevrolet-branded vehicles sold globally, and all Chevys sold in Europe come from South Korea. The Korean GM units is a key hub for CKD kits that are shipped to China and many emerging markets for local assembly. GM Korea makes Opel’s Mokka SUVlet, and the Chevy Spark.

The union says “cost per vehicle” is half of that in Australia and lower than in many other countries, Russia, included.  Workers fear a slow shift of GM’s production base from South Korea to China. The next generation Cruze will be made in China, others could follow.

From July to September  2012, GM Korea suffered its biggest-ever strike since it was created in 2002, resulting in lost production of 40,000 vehicles. In China, automobile production is relatively safe from industrial action. What’s more, street protests in China are known to  shift consumer sentiment away from certain other brands.

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Unfree Trade Agreements Fri, 14 Jun 2013 19:52:20 +0000  

Free trade agreements are great, as long as the trade is really free, and as long as people stick to the agreements. In Korea, foreign automakers and distributors say Korean lawmakers and government agencies try to keep them out. There  is talk of “import bashing,” says Reuters.

“Korea is a highly protected market. Despite recent agreements to open up its market, the government is not helping … it’s actually doing its best to keep the barriers in place,” Reuters heard from “a senior global automaker executive.”

Imports are selling well in a market that ;previously was nearly entirely home-grown. In January-April, sales of imported passenger cars accounted for 12 percent of the market, up from just 2 percent a decade ago. Hyundai/Kia sales were flat.

  • In March, the offices of the Korea Automobile Importers and Distributors Association were raided by investigators of the country’s Fair Trade Commission. The agency alleged that BMW, Mercedes-Benz, Volkswagen and Toyota Motor were involved in price collusion.
  • In the same month, South Korean lawmakers proposed a bill to reduce corporate tax breaks on cars priced above 50 million won ($44,000) and bought as company cars – typically those top-of-the-range models from German, Japanese and U.S. automakers. For luxury marques such as Bentley, Porsche and Rolls-Royce, over 70 percent are bought as company cars.”
  • This week, local media reported that BMW Korea was being investigated by the tax authorities.


Meanwhile, Autoblog joins the fray, with the harrowing tale that “BMWs are cheaper than Hyundais in Korea,” and that “foreign brands have seen market share jump from 28 percent to 41 percent over the last two years.” Utter nonsense. Reuters correctly reports that imports have a 12 percent share in Korea, 11.83 percent to be exact for the first four months of the year, according to data by the Korea Automobile Importers and Distributors Association (KAIDA).

If you go to the considerable trouble of actually looking at the data, you see that imports to South Korea, which were at homeopathic levels before the turn of the millennium, went on a slow but steady rise in 2001. The trade agreement with the EU (from where most of the imported cars come) came in effect in 2011. The chart says that imports would have gone up anyway, with the FTA, or without it.

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Your Next Cruze From Poland? Thu, 13 Jun 2013 12:34:46 +0000  



GM says it’s not true (yet) what Germany’s Frankfurter Allgemeine Zeitung reports today. The paper says it has it on good authority that by 2014, GM will move production of its Chevrolet Cruze from South Korea to the Opel plant in Gliwice, Poland.“There has been no decision made about where the next generation Cruze will be built,” a spokesman for Chevrolet Europe told Reuters,

The FAZ maintains good contacts with the labor side of Opel’s board, and it has been a grateful recipient of many interesting Opel leaks in the past. The paper cites an internal production plan as the source.

”Speculation of such a move is nothing new, especially after the U.S. carmaker confirmed the next generation model due in late 2014 would not be built in South Korea,” harrumphs Reuters. According to the wire,

“Gliwice would be a natural candidate for budget brand Chevrolet. It is the only low-cost Opel plant in Europe and it also builds the Cruze sibling compact Opel Astra. Both cars could likely be built on one assembly line with a minimum of additional investment.”

Korean unions threatened to “wage a war” if that happens. GM and the Korean unions are in wage talks, and the leaks could also be part of a shadow war of disinformation. FUD is SOP in these negotiations.

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GM May Move Mokka Production From Korea To Europe Mon, 10 Jun 2013 18:20:26 +0000

GM has rocky relations with its Korean unions, and the relations will get a lot rockier if what Germany’s Handelsblatt says is true. According to the report, GM is seriously looking into moving most of the production of the Opel Mokka to Europe.

Currently, the hot selling SUVlet is made in South Korea only.  Says Reuters:

“More than 100,000 Mokkas have been ordered since the market launch a half year ago and demand has been much better than expected, leading to production bottlenecks and long waiting lists for the subcompact SUV.

Producing the Mokka in the factory of General Motors’ Opel unit in Zaragoza would help to fill up that plant’s spare capacity and could lower losses of the division.”

An Opel spokesman told Reuters that “GM was looking for additional capacity to produce subcompact SUVs.”  The Trax, a Chevrolet-badged Mokka sibling, will continue to be built in Korea, a Chevrolet spokesman said. A shift of the Mokka production has been discussed for a while. The next generation Mokka already is scheduled to be produced in Europe.

Three days ago, the Korean unions threatened strike after hearing that the new Aveo/Sonic will be made in China and the United States.  This latest piece of news could cause the already simmering kettle to boil over.

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Selective Solidarity: Ignored By UAW Bosses On A Jaunt To South Africa, Korean Union Threatens Strike Against GM Fri, 07 Jun 2013 06:55:14 +0000

When there was labor unrest in South Africa, the UAW was quick to spend union dues for a long trip to the scenic South African locale, ostensibly to show  their solidarity with South African union brothers who, coincidentally, fought against Mercedes and Volkswagen. Back home, the UAW pulled a whole packet of race cards. It headlines, a bit strenuously: “South Africans have more rights than workers in Mississippi.”

It would have been more a propos if the UAW would have flown to South Korea to show solidarity with workers  who are about to go on strike against GM, the company, ooops, that is partially owned by the UAW.

“General Motors Corp has told its South Korean labor union it has no plans to produce the next-generation Aveo small car at its key Asian base for the time being, prompting the union to threaten strike action,” Reuters writes today.

Workers were told by Sergio Rocha, head of GM Korea, that the new Aveo/Sonic will be made  in China and the United States, and that South Korea could possibly produce the model two years after its launch.

GM and its South Korean unions are in wage talks, and GM has made many not so subtle hints  that it might reduce its South Korean presence if workers don’t fall in line. Instead, the Korean unions now threaten strike:

“Should there be no change in the company’s stance, the labor union will be able to launch strike action – our biggest legal weapon.”

The acrimonious, and often militant labor disputes in South Korea  are being steadfastly ignored by the UAW. In the last month, the UAW’s website  did not mention “Korea” once, if Google is to be believed. It’s easy to show solidarity with “our brothers and sisters in South Africa.” It seems to come a bit harder when the union brothers and sisters threaten strike against a company you partially own.

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Review: 2014 Kia Sorento EX (Video) Sun, 19 May 2013 15:20:52 +0000 2014 Kia Sorento EX, Exterior, Front, Picture Courtesy of Alex L. Dykes

To say the Sorento’s transformation from rugged body-on-frame SUV to car-based softroader has been a sales success is putting it mildly. In the first 27 months of production Kia shifted more Sorentos than they did the 8 years prior. Sales numbers like that catapulted the Korean krossover (couldn’t help it) from CX-9/Xtera/Murano competition to 7th place in the midsized battlefield. Three model years later, Kia is spicing things up with a refresh. I know what you’re thinking: why bother looking at a refresh? Because 2014 brings enough changes to call the 2014 Sorento a redesign.

Click here to view the embedded video.

After three years, most car companies slap on a new nose, tweak some paint and trim options and call it good for another three years. At first glance it seems that Kia has done the usual, but the similarity is skin deep. The front and rear get tweaks of course, but its the chassis that’s been substantially changed with new floor stamping to improve interior room, new suspension subframes, different welding techniques, suspension geometry changes, additional chassis bracing in addition to a refreshed interior and exterior. In all, only 20% of the parts from last year remain. If you doubt the magnitude of the change, check out the curb weight which is down 250lbs vs the 2013 model, that’s no small feat.

As before, the Sorento offers your choice of 5 or 7 passenger seating, yet the Sorento still isn’t a large SUV at 184-inches long. That’s 15 inches shorter than a Durango, 7 inches shorter than a Pilot and even 6 inches shorter than the other 5/7 passenger “tweener” crossover, the Dodge Journey. The RAV4, CR-V and Sportage are a half step smaller putting the Kia and its Hyundai sister-ship in their own small category. (Remember, the RAV4 ditched its 7-seat option this year.)

The Sorento has never been a flashy vehicle, that’s not Kia’s style. Instead we get slab sides reminiscent of the American competition and a front end that could easily have been turned into a new Saab 9-7x. Up front we get Kia’s new bow-tie/semi-kidney grille and our EX model came standard with the rather vertical foglights. Out back 2014 brings new tail lamps and new sheetmetal to the tailgate giving the Sorento’s rear as much style as any other mid-size crossover. Checking out that side profile you’ll notice the Sorento still sports a rather vertical hatch thanks to the 7-seat option. That means if you opt for the 5-seats you still get a cargo area that’s nice and square, making it more useful (but perhaps less sexy) than the sloping profiles of the 5-seat-only crossovers.

2014 Kia Sorento EX, Interior, Dashboard, Picture Courtesy of Alex L. Dykes


On the surface the Sorento looks like any aspiring near-luxury crossover. Until you put your hands on the dashboard. While everyone else is doubling-down on squishy injection molding and stitched pleather, the Sorento’s trendy shapes are cast from hard plastic. Before we start drawing any Chrysler parallels, you should know that Kia’s plastics look attractive, they just don’t feel premium. Is that a problem? Not when the Sorento starts at $24,100, but it is something to keep in mind if you’re contemplating a fully-loaded 7-passenger Sportage Limited at $41,850. On the flip side, the Sportage offers a high level of equipment for the dollar and a 5 year/ 60,000 mile warranty with 10 year / 100,000 mile powertrain coverage. How much are soft surfaces worth to you?

Thanks to tweaked seat designs, the Sorento’s thrones no longer feel as if they are cast from concrete, but they still aren’t as cushy as GM’s seats. For $32,650, our EX heated and cooled my backside compensation. As with every other vehicle, seats get less comfortable as you move to the back. The middle seats recline and fold in a 40/20/40 fashion allowing you to carry long cargo and four passengers at the same time. Available heated seats and integrated sunshades round out the Sorento’s compensation for the plastics choices. While the middle seats are fine for long road trips, the $1,200 third row should be reserved for emergencies, enemies and mother-in-laws.

2014 Kia Sorento EX, Interior, Rear Seats, Picture Courtesy of Alex L. Dykes

When you’re a half step between the competition dimensionally but offer the same number of seats as the big boys, something has to give, and that’s the cargo area. With 36.9 cubic feet behind the second row, the Sorento lags even the smaller RAV-4 and CR-V (38.4 and 37.2). If you don’t get that third row, you get an additional 9+ cubes under the load floor, just under what’s required to hide a journalist. (Don’t know what that’s about? Click on that video.) If you put a pair of passengers in the third row, you’re going to need a roof-top cargo box or a trailer because the cargo area shrinks to 9 cubic feet, only 2 cubes more than a Beetle Convertible.

So is $600 a pop for two seats worth it? I’d do it, and here’s why. Despite being considerably smaller than the Highlander, Pilot, Durango and Explorer, Kia’s third row offers about the same amount of room with 31.7 inches of legroom and 35.7 inches of headroom. I wouldn’t recommend anyone’s third row for daily use, but it is handy in a pinch.

2014 Kia Sorento EX, Center Console, Interior, UVO, Picture Courtesy of Alex L. Dykes


Base Sorentos come well equipped with standard Bluetooth streaming/telephone integration, SiriusXM Satellite radio, a CD player, USB/iDevice integration and six-speakers. I’m so used to saying “you won’t find one of these base models on the lot” that I did a double take when the Kia vehicle locator found 24 such examples (out of 174) within 50 miles of my location. The base system surprised with excellent sound for the price and if you don’t need navigation, there is little to complain about.

Most Sorentos on the lot will have Kia’s refreshed 8-inch touchscreen system (navigation is a further option, but standard on SX and Limited) and a large number of them will have the up-level 10-speaker audio system by Infiniti (Standard on SX and Limited, optional on all modes). For 2014 Kia has renamed and re-worked the software. “UVO eServices” must have sounded better than UVO two-point-oh. The software tweaks bring better graphics, faster response times and improved voice commands including USB/iDevice voice control. In addition to improving the system, Kia has integrated a number of smartphone apps with Google’s help. You can now download destinations to the car after looking them up on your iPhone (there is only an iOS app at the moment), find your lost car in a parking lot, use your phone’s data connection to run vehicle diagnostics/heath checks and the car will call 911 for you if the airbags deploy. None of this is revolutionary, putting UVO right in the middle of the pack. What is new is the price for the service: there isn’t one. Unlike Toyota’s Entune, Kia claims there is no fee for the service even after a few years. If you want to know more about the infotainment options, just click on that video at the top of the review.

While not strictly an infotainment device, EX models and above (optional on the base LX) get Kia’s oddly named “Supervision” instrument cluster. The 7-inch LCD disco dash looked good even in strong sunlight, but it will never be as readable as a regular old analogue gauge. Rather than going completely modern, Kia stuck to a red analogue needle against white numbers for the speedometer while the center of the LCD is used for vehicle settings, navigation directions, infotainment details and a trip computer. Unlike Chrysler and Cadillac’s latest LCD systems, this display isn’t very customizable as there are no alternative layouts or themes that can be applied.

2014 Kia Sorento EX, Engine, 3.3L Direct-Injection V6, Picture Courtesy of Alex L. Dykes


Rounding out the refresh is a revised engine lineup. The 175HP 2.4L base engine is gone with the formerly optional 191HP, 181lb-ft 2.4L direct-injection four taking its place. The 16HP and 12lb-ft bump are minor, but a better torque curve made possible by the DI sauce combined with a 250lb weight loss make the difference noticeable. On the downside, fuel economy suffers from the upgrade dropping the AWD model from 21/27/23 (City/Highway/Combined) to 19/24/21. Some of the drop is likely due to changes in the way the transmission shifts, but also perhaps to Kia re-stating their MPG numbers to be more realistic.

Optional on the Sorento LX and standard on EX, SX and Limited is Hyundai/Kia’s newest 3.3L direct-injection V6 making its way across the lineup. Cranking out 290 ponies and 252 twists vs 273/247 for the old 3.5 mill, the difference behind the wheel is largely in the way power is delivered. Our tester scooted from 0-60 in 7.23 seconds, about 2/10ths faster than last year’s 3.5L model. If you go by the EPA scores, the new engine is simply an even trade with the same 18/24/20 MPG score as before. However, unlike the 2013 model, our Sorento averaged a better than expected 22.1MPG in mixed driving as compared to 19.5 in the old model on the same route. Adding the V6 increases towing capacity from 1,500lbs to 3,500lbs with or without AWD.

2014 Kia Sorento EX, Interior, LCD Gauge Instrument Cluster, Picture Courtesy of Alex L. Dykes

Sending power to the ground is the ubiquitous Hyundai/Kia 6-speed automatic transaxle. For $1,800 you can add an AWD system with a driver-lockable center coupling. This isn’t quite the same as a locking differential in a traditional truck-based SUV, but it is more than you find in most softroaders. For 2014 Kia has also tossed in a torque vectoring system that uses the ABS system to brake wheels independently to shuttle power around for better grip. Why bother? Because everyone else is doing it and it doesn’t take much effort to re-program your braking system. Does it help? I didn’t notice a difference.

Despite the changes to the suspension and chassis, you won’t notice much of a difference out on the road either. The Sorento is light of steering and soft of spring. Thank the steering feel, or lack there of on a new electric power steering system. (Yes, the Sorento offers variable assist electric steering, but neither of the three modes brings extra feel with it.) Perhaps in keeping with its light-truck origins, the Sorento wears some high profile rubber, LX models start out with 235/65R17s , our EX model took things down to a still tall 235/60R18 and Limited models get 235/55R19 tires. Tall tires, light steering, soft springs and light weight roll bars allow the Sorento almost as much body roll in the curves as that GMT-360 SUV that came to mind earlier. Thankfully, the light curb weight which is only 140lbs more than the RAV4 (four-cylinder Sorento) means that despite the lean, grip is on par with the small guys and slightly ahead of the considerably heavier Edge, Explorer, Pilot, Highlander or Traverse.

2014 Kia Sorento EX, Exterior, Rear, Picture Courtesy of Alex L. Dykes

The Sorento is a textbook modern Kia. The exterior styling is unlikely to set your heart on fire, but it won’t offend anyone either. The interior apes the style and features of the next price class above, but casts it in durable, hard plastic. That makes the Sorento sound like a very average vehicle, but the key to Kia’s success is value. When you adjust for the standard features on the base LX model, the Sorento is a $1,500 better value than the Dodge Journey, often cited as the cheapest and most un-loved of the 7-seat set. Compare the Sorento to a comparable Ford Edge or Toyota Highlander and the Kia is $4,000-5,000 less. See why the hard dash plastics that other reviewers complain about don’t bother me? Because value speaks to me, and judging by the sales it speaks to a large number of shoppers. Toss in that long warranty and the only thing that surprises me is that the Sorento is only “7th” in the mid-size SUV class.

Hit it or Quit It?

Hit it

  • Finally a base model that isn’t a penalty box.
  • Possibly the best MPGs for a non-hybrid, V6, 7-seat crossover.

Quit it

  • The LCD speedo is interesting, but I expected it to “do” more than just show me an analogue needle.
  • The Sorento’s ride still needs a redesign.


Kia provided the vehicle, insurance and one tank of gas for this review.

Specifications as tested:

0-30: 3.0

0-60: 7.23

1/4: 15.68 @ 89.6

22.1 over 786

2014 Kia Sorento EX-003 2014 Kia Sorento EX, Exterior, Rear, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-002 2014 Kia Sorento EX-001 2014 Kia Sorento EX-040 2014 Kia Sorento EX-043 2014 Kia Sorento EX, Interior, LCD Gauge Instrument Cluster, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-041 2014 Kia Sorento EX-042 2014 Kia Sorento EX 2014 Kia Sorento EX-039 2014 Kia Sorento EX-038 2014 Kia Sorento EX-036 2014 Kia Sorento EX-037 2014 Kia Sorento EX, Engine, 3.3L Direct-Injection V6, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-034 2014 Kia Sorento EX-033 2014 Kia Sorento EX-032 2014 Kia Sorento EX-031 2014 Kia Sorento EX-030 2014 Kia Sorento EX-029 2014 Kia Sorento EX-028 2014 Kia Sorento EX-027 2014 Kia Sorento EX-026 2014 Kia Sorento EX-025 2014 Kia Sorento EX-024 2014 Kia Sorento EX-019 2014 Kia Sorento EX-023 2014 Kia Sorento EX, Center Console, Interior, UVO, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-022 2014 Kia Sorento EX, Interior, Dashboard, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-021 2014 Kia Sorento EX-016 2014 Kia Sorento EX-015 2014 Kia Sorento EX-020 2014 Kia Sorento EX-014 2014 Kia Sorento EX-009 2014 Kia Sorento EX, Interior, Rear Seats, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-008 2014 Kia Sorento EX-012 2014 Kia Sorento EX, Exterior, Front, Picture Courtesy of Alex L. Dykes 2014 Kia Sorento EX-011 2014 Kia Sorento EX-005 2014 Kia Sorento EX-006 2014 Kia Sorento EX, Exterior, Rear, Picture Courtesy of Alex L. Dykes ]]> 42
Korean Unions Mad At Akerson Tue, 07 May 2013 13:26:50 +0000

Last month, GM CEO Dan Akerson said that GM might move production away from South Korea if tensions with North Korea escalate. Korea labor unions were not amused, saying that Akerson was using the crisis as a pretext to gain the upper hand in upcoming labor talks.

Last week in Detroit, Akerson told GM’s South Korean union leader that he won’t pull GM out of South Korea. He also said he is unhappy with the Korean union, and that he will bring up the matter this week with South Korea’s President Park Geun-hye, when the “Iron Lady” will visit the U.S. this week.

Now, the union is fuming.

“We are upset by his remarks. We did not go all the way to the U.S. to hear that,” union spokesman Choi Jong-hak told Reuters.

More than four out of 10 Chevrolet vehicles sold globally, are made in South Korea.

In January, rumors about GM  shifting production to underutilized European factories made the union threaten “war” if GM does that. Knowing the militant Korean unions, this is not just a figure of speech.

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Hyundai Boss: No New U.S. Plant Mon, 06 May 2013 16:14:02 +0000 Chung Mong-koo - Picture courtesy


Hyundai’s top man shot down rumors of his company building a new factory in the U.S.  “We have no plan for a new U.S. factory for now,” Hyundai’s Chairman Chung Mong-koo told Reuters at Seoul’s Gimpo airport before leaving for the United States.

Rumors started flying when South Korea’s Financial News said that Kia is talking to Georgia state officials about constructing a new plant. These rumors were denied. Last week, Chung rekindled the flames by saying that Hyundai “will look into whether there are opportunities” to expand production overseas.

Chung is expected to visit Hyundai and Kia’s U.S. plants in Alabama and Georgia during his visit, which coincides with South Korean President Park Geun-hye’s U.S. trip.

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Even Back Home In Korea, Lying About Gas Mileage Can Get Expensive Tue, 30 Apr 2013 12:18:30 +0000

Guess which South Korean carmaker prompted the South Korean government to tighten its rules about overstating their cars’ mileage? Under new South Korean government rules “aimed at reassuring consumers after Hyundai Motor Co’s fuel economy fiasco last year” it can cost more than $900,000 if one is caught with overly optimistic mileage claims, Reuters says.

What’s more, the guidelines to calculate fuel mileage have been changed, which will lead to a 3-5 percent drop in a vehicle’s overall stated fuel economy.

Hyundai’s Sonata sedan, for example, will be said to get 11.4 km per liter, down  from currently 11.9 km.

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New Kia Plant In Georgia? What new Kia Plant? Thu, 25 Apr 2013 12:03:17 +0000

Yesterday, South Korea’s Financial News said Kia is talking to Georgia state officials about constructing a new plant, called “KMMG 2″ with an annual output of 150,000 units. This in addition to the plant Kia already has in West Point, GA. Reuters asked around, and received nothing but denials.

“The report is all groundless,” a Kia Motors spokesman told the wire. A spokeswoman for the Georgia department of economic development said there are no talks, but she would welcome them should they ever happen. West Point Mayor Drew Ferguson likewise was oblivious. It sounds like the plans for the plant were Made Up In Korea.

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Akerson Uses North Korea To Threaten South Korean Unions Tue, 09 Apr 2013 09:00:21 +0000

Last week, GM CEO Dan Akerson said that GM might move production away from South Korea if tensions with North Korea escalate. Today, Korea labor unions said Akerson is using the crisis as a pretext to gain the upper hand in upcoming labor talks.

Akerson said that GM is “making contingency plans for the safety of our employees to the extent that we can,” and while it is difficult to quickly shift production from South Korea, GM might just do that for the long-term.

Killing jobs in South Korea would do very little for employee safety. Union spokesman Choi Jong-hak thinks it’s a flimsy argument:

“It is a message by Akerson to the union saying ‘don’t make excessive demands’… They want to make the union feel jittery,” Choi Jong-hak told Reuters. “It is a threat, as the labor union here is seen as a stumbling block for its restructuring of its global production system.”

GM Korea told its union in November that it would not produce the next-generation Cruze compact in South Korea. Unions have threatened “a war” if GM shifts output to Europe.

GM is South Korea’s second-biggest automaker after Hyundai Motor Group.

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Why Detroit Is Chicken About Free Trade Agreements. And Why Korea Hates Them Too Now Mon, 18 Mar 2013 18:19:00 +0000


It’s not just the UAW that is upset about free trade agreements. The Koreans are likewise. The offices of the Korea Automobile Importers and Distributors Association were raided by investigators of the country’s Fair Trade Commission, the Financial Times reports. The agency alleges that BMW, Mercedes-Benz, Volkswagen and Toyota Motor were involved in price collusion.

Imports to Korea Jan/Feb 2013
Jan/Feb %Share
Volkswagen  GRP 6,846 29.9%
BMW GRP 6,476 28.3%
Mercedes-Benz 3,343 14.6%
Totota  GRP 1,666 7.3%
Ford 1,030 4.5%
Honda 866 3.8%
Fiat-Chrysler 743 3.2%
JLR  GRP 621 2.7%
Nissan  GRP 585 2.6%
PSA  GRP 444 1.9%
Volvo 200 0.9%
Cadillac 64 0.3%
Mitsubishi 17 0.1%
Subaru 0 0.0%
Grand-Total 22,901 100.0%

It just so happens that the four are the most successful importers to Korea, accounting for 80 percent of car imports. After free trade agreements with the EU and the U.S. were enacted, exports took surprising turns. Car imports to Korea were up 23 percent in January and February, amounting to 12.9 percent of total sales, compared with only 4.9 per cent in 2009. Korea’s total exports to the EU increased by only 1 percent in the first year after the trade pact came into force, while trade from Europe to Korea rose 37 percent.

American carmakers are not under suspicion of collusion, no wonder; they did not have a big impact on Korea. Biggest American importer to the nation is Ford, up 72 percent.

Ford is against free trade agreements, especially with Japan, and calls the negotiations a “masquerade,” Reuters says. Stephen Biegun, Ford vice president of international governmental affairs, still blames the nasty Japanese for a closed market they say is wide open. There is zero import tax on cars to Japan, and even if the alleged non-tariff barriers are gone, it won’t make Biegun happy. He said change must reach into “the very bowels of the Japanese economy.” And because the Japanese will object to foreigners reaching into their bowels, Biegun will continue to complain.

Refreshing honesty comes from a surprising camp. Four dozen democratic lawmakers wrote a letter to President Barak Obama, warning against a free trade agreement with Japan. The alleged closed market found only passing mention. The lawmakers don’t worry about exports to Japan. They are worried about imports from Japan. Says the letter:

“In an industry with razor-thin profit margins, the elimination of the 2.5 percent car tariff (as well as the 25 percent truck tariff) would be a major benefit to Japan without any gain for a vital American industry, leading to more Japanese imports, less American production and fewer American jobs.”

What Detroit is REALLY worried about is a fall of the Chicken Tax. Detroit has a near monopoly on trucks, which drive its profits.

There is one part about free trade agreements automakers the world over love: A harmonization of standards. Biegun said that the cost of designing and producing according to separate EU and U.S. safety standards was between $3 billion and $6 billion, different environmental rules added a cost of $1.5-2 billion.


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Japan And America Win Korean COTY – Hyundai Fumes Wed, 30 Jan 2013 13:27:46 +0000

Usually, we are not big on COTY’s, but this one is too good to pass up. According to lore, which is sometimes parroted in the comments at TTAC, there is mutual hate between Koreans and Japanese. This did not stop Korean journalists from crowning a Japanese car as Korea’s Car of the year: The Toyota Camry.  This was so momentous that Toyota Korea president Hisao Nakabayashi broke into tears when the award was presented at a Seoul hotel.

A lot of Hyundai executives would love to see Nakabayashi cry, but they missed it: Hyundai officials went on strike and did boycott the party after they were tipped-off. “We are perplexed. It would been a lot better if a Korean brand won the top prize,” a Hyundai official told the Korea Herald.

Since the Korea Car of the Year award was established by the Korea Automobile Journalist Association in 2010, Hyundai had an exclusive. In 2011, Kia Motors’ K5 took home the top prize, in 2012, it was Hyundai Motor’s i40.

The win of the Camry is also a win for American car exports. Taking advantage of a better won-dollar foreign exchange rate, and a Korea-U.S. free trade pact, Toyota imports all Camry vehicles from America to Korea.

Launched a year ago, the Camry has is the second best selling import in Korea, after the BMW’s 520d.

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GM Wants South Korean Workers To Go – Voluntarily Tue, 20 Nov 2012 13:02:56 +0000

GM wants to thin out its South Korean workforce while shifting production to Europe’s higher-wage locations. Korean unions already see it as a declaration of war.

In the name of “organizational efficiency,” GM’s South Korean unit offers “voluntary retirement” to its 7,000 office workers, Reuters writes. Workers who take the golden parachute will receive up to two years’ salary, two years’ school tuition support and a car voucher worth 10 million Korean won ($9,200).

A GM Korea union spokesman said GM Korea “declared a war” against the union. Two weeks ago, GM said it will exclude South Korea from the production of its next-generation Chevrolet Cruze model. It is widely believed that the beneficiary will be Opel, and what is taken away from the Korean unions is supposed to appease German unions.

GM has a 9.4 percent share from in the South Korean market which is dominated by Hyundai and Kia, controlling around 80 percent. South Korea however is a major production base for GM. About a quarter of GM’s global Chevy production is made here, most if not all Chevrolets sold in Europe are made in Korea.

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South Korean Unions Urging GM To Keep Cruze In Korea Thu, 15 Nov 2012 17:47:49 +0000

Labor leaders in South Korea are scrambling to convince GM to retain production of the Chevrolet Cruze in South Korea, though GM says that the move to 5 global facilities is a done deal.

The Cruze accounts for between 50 and 60 percent of the 260,000 vehicles made at GM Korea’s Gunsan plant. A new Cruze is expected to hit the market in 2014, and the new model is expected to be built in Europe, the United States and other locations across the globe. European production of the Cruze will be an important step for GM to help ease some of its overcapacity problems.

South Korean union workers have used strong rhetoric when discussing the Cruze’s future, stating that it is the “lifeline” of the Gunsan plant (GM has two other plants in Korea) and that “…it [GM] will face enormous resistance…” from workers if Cruze production leaves South Korea.

With an all-new model due at the end of 2014, GM is exploring other options including “…continuing to produce the current Cruze model.” Hmm…

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GM Expected To Move Cruze Production From Korea To Europe Wed, 07 Nov 2012 11:58:15 +0000

GM told Reuters that it won’t build the next-generation Chevrolet Cruze in South Korea. Reuters says this is “raising the possibility that GM might shift the assembly to Europe to help boost efficiency at its money-losing unit there.”

The next-generation Cruze is due in fall 2014 as a 2015 model. A GM Korea spokesman confirmed that the new Cruze will not be built in South Korea, but he kept mum on where the car will be built instead.

The current Cruze model makes for half of about 260,000 vehicles produced at GM Korea’s plant.

For many months, there had been rumors and leaks about GM moving production from its South Korean former Daewoo plants to Europe, to keep some of Opel’s idling capacity busy. When the rumors surfaced, South Korean unions threatened to “wage a war” if GM shifts output to Europe.

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EU Denies French Requests To Monitor Korean Auto Imports. GM Relieved Tue, 23 Oct 2012 10:46:30 +0000 The EU sent a warning shot across the bow of protectionist France. Brussels refused France’s request to monitor car imports from South Korea. According to the Wall Street Journal, import surveillance could have been Europe’s first step toward blocking or reversing tariff cuts instated by a free trade deal between the EU and Korea.

The French government and Fiat lobbied hard for a reversal of the free trade agreement with Korea, and against an FTA with Japan. The European Commission expressed its sympathy with the plight of European automakers, but warned against a myopic view of the matter. “In general, trade figures more than one year after the entry into force of the agreement are rather encouraging and indicate that the EU mostly benefited from this FTA so far,” EU spokesman John Clancy told Bloomberg.

The decision is also a warning to UAW supporters who lobby hard against free trade agreements and for closed borders. Be careful what you wish for. Oddly enough, import restrictions on cars coming from Korea to Europe would hurt GM. Most of Hyundai cars sold in Europe are made within the EU. Kia and GM are responsible for most of the imports from Korea. GM’s Chevrolets sold in the EU are nearly all made in Korea.

Politicians should be kept away from the car business.

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