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For Korean Cars in the U.S., Cheaper Is Better

Hyundai and Kia have spent billions to go upmarket, but it turns out that U.S. buyers mostly want their cheaper cars

South Korean brands Hyundai (HYMLF) and Kia (KIMTY) have spent years and billions of dollars to add SUVs, crossovers, and near-luxury cars to their lineups to live down their reputations for building entry-level cars—only to find that cheap, and especially fuel-efficient, vehicles are exactly what U.S. buyers want.

U.S. sales of tiny models like the Hyundai Accent, the Kia Spectra, and the Kia Rio are up sharply this year. Sure, they're fuel efficient, but it also helps that Hyundai has been largely able to undo its former reputation for poor quality. In July sales of the Accent were nearly double the year-ago month, according to AutoData of Woodcliff Lake, N.J.