The affiliated auto manufacturers Hyundai Motor Company and Kia Motors are aiming to triple the number of “fuel-efficient cars” that they have on offering by 2020, according to recent reports.
The move is intended as a means of improving the manufacturers’ image and standing with regard to competitiveness in fuel economy — partly owing to concerns raised by investors about the fact that Hyundai’s latest Genesis, and Kia’s Soul, have lower fuel mileage than their predecessors. Also, concerns are partly owing to the relatively recent $350 million fine received in the US for the overstatement of vehicle fuel economy.
The announcement of the recent aims comes only a week or so after the pair also pledged to increase the fuel economy of their offerings by 25% by 2020 — to meet emissions regulation standards in the US, Europe, and South Korea.
The pair also made the announcement recently that it would buy back 670 billion won ($602 million) worth of shares. This move was reportedly made as a means of appeasing investors who were angered at a recent $10 billion bid for a piece of property to be used as a new headquarters.
As analyst Yim Eun-young of Samsung Securities, put it: “Investors have complained about Hyundai’s lack of shareholder-friendly policies and communication about its vision, especially after the land deal. Today’s announcement seems to be part of its efforts to soothe shareholders and better communicate with the market.”
Reuters provides a bit more:
Shares of Hyundai have fallen 25% this year, but have risen over 17% since hitting a more than 4 year low on November 5. Kia stock has declined 0.9% while the benchmark index has lost 2.4%. Under Wednesday’s plan, Hyundai and Kia will raise their number of fuel-efficient cars to “at least” 22 by 2020 from seven now.
“We have set an internal target of making it to No.2 in the global eco-friendly car market, which is expected to grow from this year’s 2.2 million vehicles to 6.4 million in 2020,” Hyundai said in a joint statement with Kia.
Hyundai and Kia plan to release 12 models powered by gasoline-electric hybrid engines, expanding the line-up to small cars and sport utility vehicles. The pair’s green range will also have six plug-in hybrid mid-sized and compact cars, two fuel-cell cars and two battery-powered electric cars.
Good moves to my eyes. But is that enough? Fuel economy is likely to become more and more important to car buyers over the coming years as gas prices become more and more volatile.
Image Credit: Hyundai
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