Hyundai Motor halts production of two diesel engines

Santa Fe [Courtesy of Hyundai Motor]

With diesel passenger car sales falling by 30 percent annually in South Korea thanks to environmental regulations and declining demand, Hyundai Motor recently discontinued the production of two diesel engines at its Ulsan plant. After the move, there are currently no diesel models among the sedans sold by Korean automakers.

According to industry sources on Thursday, Hyundai Motor Co. and Kia Corp. have stopped producing the ‘A engine’ and the 2.0-liter ‘R engine’ at their Ulsan facility. An industry insider clarified that the discontinuation does not signal the complete phasing out of these engines but rather a production halt due to decreased demand.

The R engine, known for its robust 200-horsepower output, made its debut in Kia’s second-generation Sorento back in 2009. The diesel engine subsequently found its place in major models like the Santa Fe, Tucson, and the Genesis GV70. But the dwindling presence of diesel models across Hyundai Motor and Kia’s flagship vehicles over the last decade caused a decline in demand. Among the models offered by the two Korean brands, only the Tucson diesel variant currently features a 2.0-liter diesel engine.

The A engine, a 2.5-liter 4-cylinder diesel engine used in SUVs such as the Sorento and commercial vehicles like the Porter, saw a decline in demand, particularly after the Porter diesel model transitioned to liquefied petroleum gas (LPG) variants. Additionally, the revised air quality control act set to be implemented in January 2024 will restrict diesel 1-ton trucks in metropolitan areas, further contributing to the shift towards LPG models due to advantageous fuel costs.

According to data from the Korea Automobile Manufacturers Association (KAMA) and the Korea Automobile Importers & Distributors Association (KAIDA), diesel car sales from Hyundai Motor, Kia, GM Korea Co., Renault Korea Motors Co., KG Mobility Corp. and imported cars from January to 2023 totaled 104,392 units, and the year’s total sales are expected to fall below 2022’s 168,091 units. This reflects an ongoing decline in sales in recent years, with sales figures of 392,054 units in 2020 and 246,033 units reflecting a consistent 30 percent yearly decrease.

The dwindling demand for diesel vehicles is translating into discontinuations of diesel models and production halts for diesel engines. Hyundai Motor and Kia currently produce only two dedicated diesel engines: the S engine, primarily used in Kia’s Mohave SUV after its discontinuation in Hyundai’s Veracruz. GM Korea ceased the production of diesel engines followed the discontinuation of the mid-sized SUV Captiva in 2018 in the country, while Renault Korea Motors imports all the diesel engines for the vehicles it sells in Korea.

Over the past five years, there have been about ten instances where major vehicle models in Korea removed their diesel variants. Hyundai Motor eliminated the diesel models of the mid-sized SUV Santa Fe with its fifth-generation full change model release and phased out the diesel versions of its sedan lineups including the Avante, Sonata, and Grandeur in 2018 and 2019. Even Genesis discontinued the diesel models for its sedans, G70 and G80, and KG Mobility stopped producing the diesel model of its bestseller, the Tivoli.

Currently, only a handful of diesel models remain among Korean automakers’ offerings, including Hyundai Motor’s Palisade, Genesis GV70, Kia’s Sorento and Mohave, and KG Mobility’s Rexton series.