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Automobile industry

South Korea's Automakers Gear Up for Fuel Efficiency Regulations

Strategic Insights

— 2 min read

South Korea's top automakers Hyundai Motor and Kia Motors are racing to meet the tightening fuel efficiency regulations in the global market. The European Union plans to strengthen restrictions on carbon dioxide (CO2) emissions for new cars as of 2012, with average CO2 emission limits set at 130 grams per kilometer (g/km) by 2015 and tightened to 95 g/km in 2020. The CO2 emissions stood at 145.7 g/km in 2009. In response to the regulations, Hyundai and Kia have been developing gasoline direct injection (GDI) engines, hybrid vehicles, and fuel-efficient models to meet the requirements. They have also rolled out hybrid versions of popular models such as Avante and Forte, and are currently developing all types of eco-friendly cars to meet diverse customer demands.

Key Takeaways:

  • Hyundai and Kia are making all-out efforts to meet the future demand for environmentally-friendly cars due to tightening fuel efficiency regulations.
  • The two automakers have developed gasoline direct injection (GDI) engines, which enable 8-10 percent better fuel economy than existing engines.
  • Hyundai alone has developed 6- and 8-speed automatic transmissions, which provide 12 percent greater fuel efficiency.
  • Hyundai and Kia have rolled out hybrid versions of Avante, Forte, Sonata, and K5, and are currently developing all types of eco-friendly cars.
  • The country's top two automakers have been preparing for the expected surge in demand for fuel-efficient components.
  • Hyundai Mobis, an affiliate of Hyundai Motor Group, is exclusively supplying Hyundai and Kia with four key components, including motor, inverter, converter, and battery pack.
  • Hyundai Wia, an auto-parts unit of Hyundai Motor, is exclusively supplying Hyundai and Kia with dual clutch transmission (DCT), which enhances fuel efficiency.
  • Halla, a leading supplier of climate control system, has developed electronic compressors and cooling devices for eco-friendly cars.

Statistics:

  • CO2 emission limits will be set at 130 g/km by 2015 and tightened to 95 g/km in 2020.
  • The CO2 emissions stood at 145.7 g/km in 2009.
  • Hyundai's hybrid version of Sonata was launched in January and has seen strong sales in the U.S.
  • Hyundai and Kia are planning to apply tires with high fuel efficiency to all models in the long run.
  • A 10 percent reduction in rolling resistance would enable 1.74 percent better fuel efficiency.
  • 30% of new cars sold in South Korea will meet the 17 km/l fuel efficiency levels from 2012.

Sources:

  • Xinhua via COMTEX
  • Center for Automotive Research (CAR)
  • Mirae Asset Securities
  • Korean Energy Management Corporation (KEMC)
  • Hyundai Motor
  • Kia Motors
  • Hyundai Mobis
  • Hyundai Wia
  • Halla Climate Control

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