SEOUL -- Hyundai Motor Co. and affiliate Kia Motors Corp. said they aim to raise the average fuel economy of their vehicles by 25 percent by 2020 to meet emissions regulations in South Korea, the United States and Europe, Reuters reported last week.
The announcement came after the South Korean duo agreed Nov. 3 to pay penalties valued at $350 million to the U.S. government for overstating fuel economy ratings.
At home, Hyundai and Kia also have struggled to fend off imported rivals that have surged in popularity thanks to their fuel-efficient, diesel-powered engines.
In a statement, the South Korean automakers said they would develop next-generation engines and transmissions, reduce the weight of key models and expand their lineups of environmentally friendly vehicles to reach the target.
"In the first half of this year, group chairman Chung Mong-koo ordered [management] to secure world-leading competitiveness in fuel economy by 2020," Hyundai said in a statement.
Hyundai and Kia, which share key components, said they will replace 70 percent of their 10 gasoline and diesel engines with next-generation engines, while expanding the use of turbocharged gasoline engines.
They also will develop more advanced transmissions.
The companies, which have steelmaking affiliate Hyundai Steel, said they also will expand use of advanced, high-strength steel to make vehicles lighter.
Hyundai and Kia, which together rank fifth in global vehicle sales, plan to launch a compact hybrid and a plug-in hybrid version of the Sonata sedan next year as part of efforts to sell more ecofriendly cars.
Under the U.S. settlement, Hyundai and Kia will pay a $100 million civil penalty, spend $50 million to establish an independent fuel economy certification group and forfeit some 4.75 million greenhouse gas emission credits, worth about $200 million, that the companies have banked under the EPA's tailpipe emissions regulations.