Hyundai Motor (005380) and Kia (000270) are exiting South Korea's diesel passenger-vehicle market as Kia halts Sorento diesel production in mid-month. The 2027 model year will offer only gasoline and hybrid powertrains, with existing diesel inventory sold until depleted. The move ends a decline that reduced the companies' diesel passenger models from 15 in 2022 to five last year and then to the Sorento alone after Carnival and Staria inventories ran out. Hyundai and Kia will retain diesel production in South Korea for commercial vehicles including the Mighty, Pavise and Xcient trucks and the Universe bus, while Porter and Bongo diesel variants were phased out in 2023. Diesel accounted for 2.4% of South Korean new-vehicle registrations through July, down from 30.8% in 2020, while hybrids and electric vehicles reached 48.4% last year. The shift reflects emissions policies, restrictions on diesel vehicles and stronger competition from hybrids and EVs. After the withdrawal, KG Mobility's Musso and Rexton will be the only South Korean-made diesel passenger models, while import brands retain limited diesel offerings. Hyundai and Kia are redirecting their strategies toward hybrids and EVs, including expanded hybrid programs and new electric models through 2030.