SEOUL: Hyundai Motor Co and affiliate Kia Motors Corp plan to triple their number of fuel-efficient cars by 2020, addressing concerns about the pair’s green track record and competitiveness in fuel economy.
Investors have voiced concern about Hyundai’s latest Genesis and Kia’s Soul having lower fuel mileage than their predecessors, and about a $350m fine in the United States for overstating vehicles’ fuel economy.
The announcement yesterday came a week after the pair pledged to raise the fuel economy of their vehicles by 25 percent by 2020 to meet emissions regulations in the United States and Europe and at home in South Korea.
It also followed an announcement on Tuesday that the pair would buy back 670bn won ($615m) worth of shares, in what was widely regarded as an attempt to appease investors angered by a $10bn bid for property for new headquarters. “Investors have complained about Hyundai’s lack of shareholder-friendly policies and communication about its vision, especially after the land deal,” said analyst Yim Eun-young of Samsung Securities.
Shares of Hyundai have fallen 25 percent this year, but have risen over 17 percent since hitting a more than 4 year low on November 5. Kia stock has declined 0.9 percent while the benchmark index has lost 2.4 percent.
Under Wednesday’s plan, Hyundai and Kia will raise their number of fuel-efficient cars to “at least” 22 by 2020 from seven now.
Reuters
