Hyundai CEO John Krafcik will have to start digging into his corporate pockets.
Forced to restate mileage claims after a government audit, Hyundai and its Korean sibling Kia could be in a world of financial hurt – even as they struggle to overcome the potential damage to their image which, in recent years, has put an emphasis on delivering industry benchmark fuel economy.
With several lawsuits already filed and more likely, Moody’s Investors Service has warned that the ultimate cost to the two brands could reach $100 million in the U.S. While other analysts aren’t ready to embrace that specific number, there is clear consensus the damage may be costly and long-lasting.
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Together, Hyundai and Kia “will incur additional annual costs of about $100 million until the affected models are largely scrapped,” warned the ratings agency in a new report. It also noted that despite the size of that figure, it comes to less than 1% of the Korean maker’s total earnings.