Kia, Hyundai Hope to Keep Top CAFE Rankings

HWASEONG, South Korea – By any measure, Hyundai Automotive Group’s rise has been nothing short of spectacular, and powertrain technology has had a lot to do with that success.

This theme was clear during a 2-day international powertrain conference the auto maker hosts near its Namyang research and development center 30 miles (50 km) south of Seoul.

Next-gen EV to replace BlueOn (above), introduced in September 2010.

In the past 14 months, Hyundai and its Kia sister brand have launched a series of new engines and transmissions and have several more in the pipeline, including a 7-speed dual-clutch transmission.

The newest in its lineup: the 1.6L Gamma turbocharged gasoline direct-injection 4-cyl.

“We put GDI in every car,” says Yang Woong-chul, Hyundai vice chairman and head of the auto maker’s global research organization. “Eventually, this will help raise fuel efficiency throughout our vehicle lineup.”

At the conference, Hyundai says its 2025 corporate average fuel economy target is 60 mpg (3.9 L/100 km), up from 38 mpg (6.1 L/100 km) today.

In the U.S., Kia and Hyundai currently rank one-two respectively at 34.9 mpg (6.7 L/100 km) and 34.4 mpg (6.8 L/100 km) in fleet fuel economy, ahead of Toyota, Honda and Volkswagen and more than 5 mpg (2 km/L) above the industry average.

Meanwhile, Yang confirms the auto maker will mass-produce an electric car beginning early 2014. The model will replace the limited-production BlueOn EV Hyundai introduced in September 2010 for fleet-test purposes. To date, Hyundai has leased 280 units, mainly to Korean government agencies.

The auto maker plans to begin domestic sales of the new model late this year and sell 2,000 by the end of 2013. In 2014, when exports get under way, Hyundai hopes to boost yearly sales to 20,000 units, he says.

Vice Chairman Yang Woong-chul heads Hyundai’s global R&D.

Yang says Hyundai is not developing EVs with the intention of replacing its conventional model lineup powered by internal-combustion engines.

“We see EVs as a new and different form of transportation,” he says, “much like motorcycles or even bicycles.”

And he warns battery costs are still too high and EV range too limited.

For the time being, Hyundai will work mainly with LG Chem in lithium-battery development. “We have dealings with other suppliers, but we feel that by focusing on a single supplier it will help them become more competitive.”

LG Chem’s lithium-polymer battery was selected for hybrid versions of the Hyundai Sonata and Kia Optima while SK Energy supplied the battery currently used by the BlueOn. In a brief test drive at Hyundai’s track here, the 4-door BlueOn handles confidently and feels plenty powerful, easily achieving 71 mph (114 km/h).

Yang, who took over as head of Hyundai’s research organization in March, reaffirms the auto maker’s commitment to developing fuel-cell technology. “If we can produce 10,000 units, cost would be double that of a standard car,” he says.

In October, the European Commission selected Hyundai’s ix35 FCEV as a demonstration vehicle for the Fuel Cells and Hydrogen Joint Technology Initiative. The auto maker reportedly plans to operate more than 30 iX35s across the continent by 2012.

And in Korea, jointly with the government and several energy companies, it has set up 11 hydrogen-fueling stations in metropolitan Seoul.

“Our chairman (Chung Mong-koo) is committed to building a hydrogen infrastructure,” says Yang, adding that fuel-cell vehicles “are the ultimate eco-vehicle.”

Overall, Yang says BMW and Mercedes are Hyundai’s main benchmarks in the powertrain arena.

He says Hyundai and Kia combined to sell 5.7 million vehicles last year, and that growth has been capped at 6.5 million units.

“We don’t have plans to build any more plants,” Yang says. “We don’t worry about being first, second or third. We just want to provide good quality to our customers.”

With respect to platforms, Yang says Hyundai currently has seven, for both Hyundai and Kia, and that the number will be reduced to six in the future.

The auto maker also remains lukewarm with regard to developing a pickup truck. “We have enough work with cars,” he says. “We want to put our focus there.”

Hyundai spends $2.5 billion on research and development annually, much of it going to projects at the 857-acre (347-ha) Namyang facility, where the auto maker employs 10,000 researchers and engineers, including 2,000 powertrain engineers.