[Car Talk Forest] Hyundai Kia's Choice in the 'Sorento Hybrid Incident'

[Asia Economy Reporter Kiho Sung] Kia Motors' Sorento, touted as the most anticipated model in the first half of this year, has faced an unprecedented situation of failing hybrid vehicle certification due to subpar fuel efficiency. Kia Motors initially explained it as an 'employee mistake.' However, the damage to Hyundai-Kia seems too significant to be dismissed as a mere error. Compensation for pre-order customers is one issue, but there is also a serious setback to the long-term plan to dominate the sports utility vehicle (SUV) market through the hybrid model. Additionally, this could negatively impact Hyundai's Santa Fe, which is also scheduled to launch a hybrid version. It seems Hyundai-Kia's sighs can be heard from here.

There are roughly three scenarios Hyundai-Kia can take moving forward. First, they could sell the current hybrid model as is, without tax benefits. In fact, although it falls short by 0.5 km/ℓ from the hybrid standard, a fuel efficiency of 15.3 km/ℓ is excellent compared to regular models. Considering that the annual tax for the 1.6ℓ model (under 1600cc) is 273,000 KRW and for the 2.0ℓ model (under 2000cc) is 520,000 KRW, it can be considered attractive. However, the high price remains an issue.

This brings us to the second option. The second option is for Hyundai-Kia to adjust the price. The company would guarantee customers the hybrid benefits provided by the government through price reductions. Currently, this second option seems the most likely choice.

However, neither of the above two scenarios can be a fundamental solution. The first option has the problem of high prices. In any case, the acquisition and registration tax of around 2.3 million KRW is not supported. The hybrid model itself is already expensive, and the cost of purchase increases further. The second option aims to compensate for this, but if the subsidy is larger than expected, customers choosing other models might feel disadvantaged. It could also spark controversy over 'what exactly is the profit margin on this vehicle?'

Moreover, both the first and second options fundamentally mean giving up on the hybrid vehicle status. The issue of what to do with the Santa Fe, which was supposed to adopt Sorento's hybrid system, remains completely unresolved.

The third option is to pursue mechanical improvements. The newly released 1.6ℓ engine has a displacement of 1598cc, and by slightly increasing the engine cylinder capacity by just 2cc to meet the 1600cc threshold, the hybrid standard would drop from 15.8 km/ℓ to 14.1 km/ℓ. However, this is not easy either. A car engine is not something that can be upgraded instantly. Since the launch is imminent, this is difficult in terms of timing and can only be considered during the next minor update.

For a fundamental solution, revising the government's outdated hybrid standards should be the top priority. Currently, engine downsizing is the global automotive industry's trend for environmental and fuel efficiency reasons. However, downsized engines face the ironic challenge of stricter hybrid standards. Government policies are hindering corporate technological innovation.

Although Hyundai-Kia made a mistake with the Sorento hybrid, I find it hard to blame them. It is indeed frustrating. But if Hyundai-Kia had developed the hybrid based on the 2.0ℓ standard, they would only need to meet the 14.1 km/ℓ criterion. They got into trouble trying to do better. If we truly want eco-friendliness, shouldn't the government revise its standards first?