More good news for Hyundai/Kia: new U.S. trade pact favorable
South Korean automakers received a pretty big shot in the arm as a trade agreement was reached with the United States. The trade pact, which lasts for 15 years, took nine months to negotiate. With the new agreement, tariffs will be immediately lifted on cars with engine displacements of 3-liters or less. Cars with displacements greater than 3.0L will have to wait three years, and trucks will have to wait 10 years before the tariff is lifted. As expected, Hyundai stock shot up 3.3% on the news, and Kia saw an increase of 5.5%.
For their part, in three years the South Korean government is levying a flat tax of five-percent on all vehicles, domestic or imported. Automotive News cites experts who believe the trade agreement won't help US automakers much, since demand for their products isn't as high as that of luxury automakers like Lexus or Audi.
Within the past few years, Hyundai and Kia have gone from makers of cheap, unattractive junkers with great warranties, to companies with good quality, improved designs, and great warranties. Losing the import tariffs will help Korean automakers deliver good products at an even better value. With new products on the horizon like the RWD, V8-powered Hyundai Genesis concept, we think the domestics and Japan had better take notice of the South Korean automakers, or risk getting left in the dust.
[Source: Automotive News (Sub. Req.)]
Reader Comments (Page 1 of 1)
Maineiac 8:18AM (4/03/2007)
This doesn't help Hyundai all that much in regards to their move upmarket---a move to secure higher profits. Hyundai enjoys higher profits on its 3.3 and 3.8liter powerplants. It should help Accent, Elantra, Sonata 2.4, Tuscon and Santa Fe 2.7, but will not help the Sonata and Santa Fe 3.3 and Azera and Entourage 3.8 and the new Genesis 3.8 and 4.6 V8.
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Jae 8:28AM (4/03/2007)
#1 I was actually under the impression that this import tariffs were being lifted in Korea (the tax system for automobiles was - or still is rather based on engine capacity - so its actually a tax system really, not tariffs).
Korean manufacturers benefits from the FTA because tariffs on their vehicle is lifted, and American manufacturers benefit because import tariff is lifted (8% or something), and because American vehicles generally have a large engine.
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Richie638 9:07AM (4/03/2007)
The Koreans hate us, why would an American buy their cars?
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EnviroBob 9:20AM (4/03/2007)
South Korea, home of Hyundai / Kia, is a strong ally of the US. It is North Korea that hates us.
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Greg 9:55AM (4/03/2007)
But will this really result in less expensive Hyundais for the American market or better profit margins for Hyundai?
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felipe 9:45AM (4/03/2007)
guy's, everyone hates us....wouldn't you?
'cept maybe the canadians, but I just think they are very tolerant and could care less about us.
go hyundai!
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Korean_Manufactures 11:20AM (4/03/2007)
Hyundai is considering the launch of a separate premium brand to compete with its Japanese rivals like Toyota did with Lexus, Nissan with Infiniti and Honda with Acura, a premium marque from Hyundai would give the Korean carmaker the prestige and justification for the higher prices that inevitably come with producing up-market products.
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Korean_Manufactures 11:29AM (4/03/2007)
Lexus better watch out for Hyundai
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Korean_Manufactures 11:28AM (4/03/2007)
but i thinnk Hyundai shouldn't make a sparate premiun brand
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Korean_Manufactures 11:28AM (4/03/2007)
because Hyundai all ready has two Luxury cars coming out the 2007 Hyundai Veracruz and the 2008 Hyundai Genesis (at some point for the name to change)
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felipe 11:45AM (4/03/2007)
geez man, your a bigger hyundai pusher then me
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Bob-omb 11:58AM (4/03/2007)
I'm so sick of this talk about Hyundai "moving upmarket." They're not going to SHIFT upmarket, abandoning compact and subcompat cars, they're going to EXPAND upmarket, adding more expensive models. How is this so hard to understand?
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Nellydesign 2:03PM (4/03/2007)
Good thing we are "removing" tariffs on their stuff while they still gouge ours. The people bargaining our trade agreements need to be fired... upon...
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gorganzolla 2:33PM (4/03/2007)
I own a 2004 GLS V6(the GLS monicker dropped since jan of this year, IIRC)... and it is OK. Better than some Domestics, and maybe a few others like Suzuki's Daewoo cars, etc..
BUT, Resale is HORRIBLE!
I wanted to dump my car at the 50% paid off mark(near that now)...
I would take a 4 thousand dollar hit in trade in, in good condition, and 40Kmiles(Low miles for an 04).
Our tC, with 75K? I could get 11,100 for it, and we owe 12,100!
Checked out a Focus( read they were good with gas, and cheaper due to 3-4K sale this weekend)... got in one, and it was like going back in time 20 years!
We are keeping the Scion tC.
No more Hyundai's for us, especially with HORRIBLE trade in value's .
Most people can trade in their vehicles by the 3rd year(of payments, out of 5), Not for Hyundai. Try MAYBE by 4.5 years paid off, MAYBE.
No More.
And, yes, I doubt Hyundai will knock off 500-1000 fromt he Elantra, either. They'll keep the msrp's high(too high).
Similar to new Lancer, but no where near as cool looking(or tuneable for more fun).
If I am gonna take an MPG hit, due to not as good as toyota/honda (tighter tolerances inside of engine and tranny)engines... might as well"" waste" my money on a looker car, at least, with some fun dialed in on the drive.
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Mr. Oak 3:02PM (4/03/2007)
EnviroBob: 4. South Korea, home of Hyundai / Kia, is a strong ally of the US. It is North Korea that hates us.
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Most of our "Allies" dispise us. This "friendship" has been very beneficial to South Korea. So, they tolerate it.
Here is a List of our best "friends" that would be dancing in the streets if the US were to disappear tomorrow.
Just about everyone in Europe: They sick of playing second fiddle.
All of our "Allies" in the Middle-East except Israel and Kuwait.
Most of South and Central America - Sick of being Bullied.
I once dated a S.Korean girl, she always got really upset when anyone asked her if she was from the South or North Korea. You see, when the cease fire went into place in '53, (the war still isn't officially over). Her family was split up. Some in the north and some in the south (I'm sure the hers, was not the only family that this happened to). To those people there still is only one Korea.
Hate may be too strong a word here, Despise? hell yeah they do.
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Don 3:05PM (4/03/2007)
Well, I'm glad to see every other country's auto industry doing well besides ours.
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Ortin 3:37PM (4/03/2007)
Poster 16: DON:
Well, who's fault is it that everyone elses auto industry is doing well except USA's?
Does Toyota make GM build junk like Cobalt?
Does Hyundai make them build junk like the Aveo?
Does Kia make Ford build horrible junk(interior) like the current Focus?
And Chrysler..... what, 2-3 bail outs in nealry 30 years? Who's fault is that?
Blame Honda for building superior cars people want to buy, vs Chrysler's Neon's and Sebrings?
PUHLEAZZZZZZZZZZZZZZZE!
You enjoy that junk?
Neon is gone....has been for over 1+ years.
Caliber was advertised as UGLY on tv, intentionally.
I see NO CALIBERS even in the "Buy American"(blindly, even if the engine is from China, like the Chevy Equinox V6 is)types driveways. NONE. Only 1 Chyrlser in 2 miles any direction.
JUNK is JUNK, no matter who builds it.
Why not be honest. Go test drive a current model Ford Focus, then try say Corolla or Civic... and 100% honesty, if you like the Focus better, that's cool. Most people with eyesight and hearing can see the quality of the interior of a corolla/civic vs focus, and can hear NVH(Big Time) in the foucs vs corolla and civic.
Even the Elantra makes the (out of..) Focus seem like something along the lines of the old Pinto!
Gimmme a break.
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reddsharkk 4:13PM (4/03/2007)
# 14: why must you post a sob story of your inequity on a car you financed for 5 years? Are your financial stumblings the fault of an automaker? When did anyone rave about the resale value of a Hyundai? When do people have equity after 2 years? It sounds like a lot of whining. If you are taking out a 5 year loan with the intention of getting rid of the car in 3 years, YOU are the stupid one. Maybe you should consider a LEASE, where you pay for the use of a car over a certain length of time. Then you step away from it, and get a new car! What a concept!
And how is 40k low miles for a 3 YEAR OLD CAR? Sounds like average milage to me! 10k would be low miles. It appears to me that you are a nice target for the car companies: insecure, weak, financially stupid, and easily led into long financing terms. Its funny that you post this on a thread about trade tariffs! Loser.
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Fais La 7:40PM (4/03/2007)
These replies are pretty pathetic.
#3: I'm not too fond of Americans but I drive an American car.
#5: Don't speak for Canadians.
#12: Take it easy buddy.
#13: Yes they should be fired. You should write to your congressman.
#14: Let me reword what #18 said. Know your needs before you make a purchase and you won't be disappointed. Plus, cars with a lesser resale value usually cost few thousands less so depending on what your plans are for this car, this can be worth your while. That's how I wound up with two American cars in my driveway.
#15: I never dated a Korean.
#17: I guess grammar wasn't your thing in school?
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Brian W 7:57PM (4/03/2007)
Lets destroy America some more with more cheap labor and parts! If north would bomb south then our auto industry would be fine, a win win situation.
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