SEOUL, Korea - Hyundai Motor Co., South Korea's dominant automaker, has gotten a boost from the Korean government's decision to allow the sale of diesel-powered cars.
Last month, the government announced it would allow the sale of diesel cars starting in January 2005. Most observers say the new regulations favor the automakers that already make diesel engines in Korea: Hyundai and its affiliate, Kia Motors Corp.
But the rule appears to penalize two automakers who do not yet make diesel engines in that country: GM-Daewoo Auto & Technology Co. and Renault Samsung Motors Co.
"The Korean government is moving to protect the local auto industry by bolstering Hyundai Motor and Kia Motors," says Kim Sang-ik, an auto analyst with Daishin Securities Co.
"It thinks more diesel car exports to the European market are needed as South Korean automakers, including Hyundai and Kia Motors, are depending on the U.S. market too much."