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Hyundai, Kia Agree to Settlement Over Fake Fuel Economy Numbers

Nearly 900,000 U.S. owners eligible for settlements.

by on Dec.24, 2013

Hyundai and Kia overstated mileage by as much as 6 mph for vehicles such as this Soul.

Nearly 900,000 American owners of Hyundai and Kia vehicles could be in for an unexpected holiday present, the settlement of a class-action lawsuit filed following revelations the two Korean carmakers had faked fuel economy numbers on a variety of models sold during the 2011 to 2013 model-years.

Following an investigation by the U.S. Environmental Protection Agency, the two manufacturers – both owned by the same, Seoul-based conglomerate – acknowledged that the stated mileage of products like the Hyundai Elantra and Kia Soul had been inflated by anywhere from 1 to 6 miles per gallon.

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Hyundai originally offered to reimburse owners on an annual basis for higher fuel costs – plus a 15% bonus for the inconvenience – but the process requires motorists to visit a dealership each year to have their payment calculated depending upon how many miles they have clocked.

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Hyundai Settles Lawsuits Over False Mileage Claims

Kia also expected to settle.

by on Feb.27, 2013

The Hyundai Elantra was one of the vehicles for which Hyundai had to restate mileage.

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.

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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.

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Hyundai Sonata Sets Sales Record

Little impact from fuel economy flap.

by on Dec.28, 2012

Hyundai's Sonata sets another sales record.

Even with a big weekend to go, sales of the Hyundai Sonata have already an all-time record, surpassing the 225,961 sales the midsize sedan logged in its record-setting performance last year. Sonata joins the Elantra, Veloster, Genesis, and Equus in setting all-time sales records for Hyundai in 2012, the maker confirmed.

Significantly, the maker has shown little sign of losing sales momentum despite word last month that it — and Korean sibling Kia — had fudged their fuel economy numbers.

With the year wrapping up at a significantly hotter pace than most analysts had anticipated, Hyundai is by no means alone. Among the makers who have been setting sales records in recent months are Audi, BMW, Porsche and Subaru. And more likely will join the list when December sales are tallied.

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Car sales this month are expected to grow by better than 10% — and possibly more than 15% — despite wavering consumer confidence brought on by a lack of a budget and tax deal in Washington D.C.

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False MPG Claims Could Cost Hyundai/Kia $100 Mil

Lawsuits, fines, customer reimbursements will add up big.

by on Nov.07, 2012

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.

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EPA May Expand Probe After False Hyundai/Kia Mileage Claims

But even mpg numbers that meet regs could be exaggerated, industry insiders concede.

by on Nov.05, 2012

Those Kia Hamsters apparently fudged the mileage numbers on the Soul and other models.

Watch TV for more than an hour in prime time; pick up a newspaper or magazine; or check the ads that pop up while you’re searching the web.  Odds are you’re bombarded with ads pitching the latest fuel economy numbers from one manufacturer or another.

“Mileage has become the number one concern of American motorists,” Ford Chief Operating Officer Mark Fields noted earlier this year.

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But are those numbers valid? That’s the question motorists – and regulators – are left wondering in the wake of the revelation, last week, that Korean makers Hyundai and Kia had inflated their own mileage figures by as much as 6 mpg on 13 separate models. The Environmental Protection Agency is apparently getting ready to review other makers’ mileage claims. Meanwhile, even numbers that meet government scrutiny are coming under question because of the way the industry is promoting mileage in advertising.

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Hyundai and Kia Admit Overstating Fuel Economy

Gap of up to 6 mpg will brings fines, could lead to lawsuits.

by on Nov.02, 2012

Kia overstated the mileage of its Soul by 6 mpg, according to the EPA.

The two major Korean automakers operating in the U.S. have acknowledged overstating the fuel economy delivered by vehicles like the Hyundai Elantra and Kia Sorrento by as much as six miles per gallon.

Discovered during a routine audit by the Environmental Protection Agency, the makers will now face government sanctions that could add up to millions of dollars in fines.  They have promised to refund money to buyers but also could face the same lawsuits other makers have been hit with after promoting inaccurate mileage or performance numbers.

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“Consumers rely on the window sticker to help make informed choices about the cars they buy,” said Gina McCarthy, assistant administrator of the EPA’s air-quality office. “EPA’s investigation will help protect consumers and ensure a level playing field among automakers.”

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Hyundai’s 40 MPG Claims Challenged

Maker sued over allegedly misleading mileage numbers.

by on Jul.11, 2012

At the center of a debate over mileage claims: the 2012 Hyundai Elantra.

Hyundai Motor America has emerged as the U.S. auto market’s fuel economy leader. In fact, a new report from TrueCar.com, an automotive research firm, indicates Hyundai was instrumental in boosting the mileage of the typical vehicle sold in June to 23.0 mpg in June 2012 compared to 21.6 mpg in June 2011.

Hyundai’s own average mileage was 27.7 mpg in June, the highest in the industry.  The maker notably claims it now has five models delivering better than 40 miles per gallon on the highway based on EPA-approved numbers.

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But has Hyundai actually rigged the deck?  That’s what a new lawsuit is alleging.  The maker has been tagged in a lawsuit by an organization calling itself Consumer Watchdog filed by Cuneo Gilbert and LaDuca LLP of Santa Monica. They claim the Korean carmaker has used misleading fuel economy claims in its advertising.

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Hyundai Chief Sees Slowdown in Sales Growth

Capacity can’t keep up with demand, so maker shifts goals.

by on Jan.18, 2012

Hyundai Motor America CEO John Krafcik.

It was a good year for Hyundai – perhaps too good.

The Korean carmaker, long known for providing cheap and cheerful econoboxes, scored a solid hit with its must upscale model ever, the premium-Luxury Equus.  It landed its second win with a coveted North American Car of the Year trophy for the compact Hyundai Elantra sedan.  And it saw sales surge to another record.

The numbers would have gone even higher, contends John Krafcik, CEO of Hyundai Motor America, if the maker had enough capacity.  “Even in the worst days after the earthquake and tsunami hit Japan, our inventories have been shorter than either Toyota or Honda,” he said during a conversation with TheDetroitBureau.com.

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The Korean carmaker is actively looking for ways to boost production at its Alabama assembly plant, as well as at a factory run by its sibling Kia providing some additional product for Hyundai dealers.  But barring a sudden slowdown in sales, Krafcik believes Hyundai can’t come near to meeting potential U.S. demand in 2012.

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Typical Car Got 0.5 MPG Better Mileage in 2011

Hyundai led industry, among major makers, at 26.6 mpg, says new study.

by on Jan.13, 2012

Hyundai led the industry, at least among major manufacturers, when it came to fuel economy in 2011.

The fuel economy of the average vehicle sold in the U.S. last year increased by a half mile per gallon over 2010 – in the process savings American motorists a collective 214 million gallons – or $722 million at the pump — according to new research.

The typical vehicle got 22.2 miles per gallon, reported data tracking service TrueCar.com, up from 21.7 mpg in 2010.

But there was a wide disparity among manufacturers.  Chrysler, which is heavily dependent on vehicles like the big Ram pickup and Jeep Grand Cherokee SUV, averaged just 19.9 mpg a 0.2 mpg increase year-over-year.  Korean carmaker Hyundai, which sells several crossover/utes but no truck models, averaged 26.6 mpg, a 1.3 mile per gallon gain.

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Hyundai has been heavily promoting the mileage of its vehicles, four different models now rated by the EPA at over 40 mpg, and that “is right up there with design and with improvements in driving dynamics for boosting our sales,” said Hyundai Motor America CEO John Krafcik, referring to the 20% jump in demand the company reported in 2011.

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40 MPG Rating Helps Hyundai Move the Metal

Maker believes it can hit 50 mpg by 2025.

by on Jul.11, 2011

Demand for better mileage is making it difficult for Hyundai to keep up with demand for the new Accent.

Hyundai, which is making an aggressive push to claim the fuel-economy crown long held by Japanese automakers such as Toyota and Honda, has discovered that pitching 40 mpg is a fast way to draw customers into its showrooms.

The Korean maker also appears to be breaking from its major rivals suggesting it is on the way to delivering fuel economy numbers in excess of 50 mpg by 2025, not far off of the federal government’s proposed jump in the Corporate Average Fuel Economy, or CAFE, standard.

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“Hyundai aims to be the fuel economy leader and our ’4 x 40′ strategy is accelerating our overall fuel economy improvement, which now tops 35 mpg across the entire lineup,” said John Krafcik, president and CEO, Hyundai Motor Americal, who has said Hyundai’s entire fleet already meets the 2015 fuel economy standard of 35.6 mpg.

“But we really see 40 mpg as a starting point. We committed to at least 50 mpg corporate average fuel economy by 2025 and remain the only automaker to set our sights so high,” Krafcik said.

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