Hyundai has agreed to a settlement ending an embarrassing episode triggered by the revelation the maker had overstated its fuel economy numbers.
Sibling Korean brand Kia also is expected to reach an agreement over similar claims. The two makers last November acknowledged inflating the mileage claims for 13 models by as much as six miles per gallon.
While not all details have been released, Hyundai apparently has agreed to offer owners of vehicles covered by the lawsuits to take a lump-sum payment covering the additional costs they can expect to incur as a result of lower-than-expected mileage.
After confirming it had misstated its fuel economy and quickly apologizing, Hyundai – and Kia – last year offered to reimburse owners on an annual basis, adding another 15% for “goodwill.” But that approach would have required motorists to go to a dealer each year to have their odometers checked.
The two Korean carmakers blamed “procedural errors” for over-stating the mileage of vehicles like the Hyundai Sonata and Kia Soul. While the EPA is the final arbiter of automotive fuel economy numbers, manufacturers generally conduct their own tests before submitting the result to the government for certification. A routine audit uncovered the discrepancies.
The discovery impacted about 900,000 vehicles sold in the U.S. over the last two years. And it left egg on the face of two of the American market’s fastest-growing brands. Both makers routinely used their advertising to boast of the high mileage of their products.
The settlement came a month after 38 lawsuits filed in federal court were consolidated into a single action assigned to U.S. District Court in Los Angeles.
Hyundai had previously set aside $225 million to cover the cost of compensating owners, Kia anteing up $187 million. While specifics of the settlement with Hyundai haven’t been released, one of the original 38 lawsuits claimed the total cost would come to $775 million for both makers.
The new settlement would apparently allow motorists to continue to receive annual payments based on their mileage or accept a lump-sum payment.
While the two Korean manufacturers were singled out by the EPA for the most egregious misstatement of mileage numbers ever, there have been growing concerns about the fuel economy claims being made by a number of competitors.
Honda recently reached a settlement over the mileage of older Civic Hybrid models and Ford has come under fire from influential Consumer Reports magazine for the fuel economy claimed for such vehicles as the Fusion sedan and C-Max people mover.
Government regulators have said they will more deeply scrutinize manufacturer test results though it is unclear if any other makers could face the same problems as Hyundai and Kia.