Hyundai Motor and affiliate Kia Motors have decided to delay the commercial production of hybrid cars powered by electricity and petrol by more than 12 months than earlier scheduled.
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According to the Korea Times, the automakers originally planned to start massive production of the cars in late 2007, but have now said the eco-friendly cars – the Verna and Pride – will be available from 2009.
Hyundai Motor reportedly said the delay reflects scepticism about commercial viability and possible violation of international laws.
“The cars are not marketable in their current form,” a company spokesman said. “We have technologies. But how can we sell those by bearing the risk of operating losses?”
Commenting on promised government aid, he said: “Global competitors may file complaints with the World Trade Organisation (WTO) against us if we lower consumer prices of the cars after receiving state funds.”
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By GlobalDataExpensive hand-making processes involved in producing hybrids are factors precluding price reductions, the paper noted.
The high prices also reflect higher research and development costs. For car makers, there is no choice but to bear the burden of losses by lowering prices if they want mass sales of the hybrid cars.
The Korea said Hyundai and Kia have been supplying the hybrid Verna and Pride models to government ministries since 2004 as a pilot scheme ahead of commercialisation.
A Kia official told the paper: “We planned to sell to consumers from late 2007 after mass sales to ministries by late 2006. But we have to delay the schedule,” adding that its revised plan is the same as its Hyundai affiliate.
The report said policymakers are expressing anxiety over the future of Korea’s automobile industry as developed nations hurry to unveil as many hybrids as possible, amid growing regulations to protect the environment.
In an earlier interview with The Korea Times, Commerce-Industry-Energy Minister Chung Sye-kyun said: “Hyundai Motor has fallen behind Toyota Motor in the research and development of hybrid cars.”
Chung reportedly said concerns are growing as Toyota has already applied for a number of patents for hybrid vehicles.
Japanese car makers plan to market their world-class hybrid cars in the country, signaling a wake-up call for South Korean competitors who are in the early stage of commercialising their environmentally friendly models.
Honda plans to begin selling hybrid cars for the first time in South Korea by introducing the Accord Hybrid sedan in the late second or third quarter of 2006.
Toyota, which has gained popularity in its overseas markets with hybrid vehicles, will also introduce an environmentally friendly sport utility vehicle (SUV), the Lexus RX400h, there during the third quarter of the year.
