Korean car makers did - just like Japanese ones had done in the past - open design & engineering centres in Europe: to design & engineer vehicels that suits European customer better than the ones from Korea (or eg. Japan). Nissan had done it, Honda as well, so did Toyota, and Hyundai, Kia etc
And mind that they have bring many designers & engineers from respected Euro car makers (eg. Fink from MB, Schreyer from Audi etc).
I'm sure Hyundai & Kia can't hurt premium automakers much (rivaling Audi TT sounds very funny!), but the economy class can be worried: just look at latest Toyota Auris, Kia Cee'd, etc
But Kia vs Audi?
C'mon!
Like I said many times: cars are not products only - they should be considered as brands as well. And brands come also with intangible values based on emotions, and where also history & tradition & brand cache is important factor. You can offer a perfect car, but without emotional buzz (eg. emotional design, brand values etc) such a car wont have much added value.
Today emotions (based on brand image) are the most important factor - not even the technology is an advantage (eg. even a new Renault Twingo has an optional iPod integration available, and bluetooth!; even small cars came with navigation systems & voice recognition etc).
So brand image (based on core brand values + brand cache (history & tradition) + design) will be the most speciall added value in the future. And here some car maker have a huge advantage.