Hyundai and Kia To Compensate Consumers for Overstating Mileage Claims
- Hyundai and Kia said they overstated the estimated fuel economy on about 900,000 2011-'13 vehicles, including the 2012 Hyundai Accent and 2012 Kia Soul.
- The Korean companies will compensate owners for the inaccurate claims.
- The EPA announced that its investigation into "inflated mileage claims" prompted the action by Hyundai and Kia.
The Korean companies will compensate owners for the inaccurate claims in an action that is unprecedented in the U.S. auto industry.
While Hyundai/Kia could not put an exact price tag on the payback, the program was expected to cost in the millions.
"Certainly millions, no question," said John Krafcik, Hyundai Motor America CEO in a conference call with reporters on Friday. "There is no question it is definitely a significant investment. We're going to spend what it takes to make it right for our customers."
Hyundai could not say exactly how much an individual consumer would receive, but gave an example of a Hyundai owner in Florida who drove around 15,000 miles a year. Taking into consideration local gas prices, that consumer would receive approximately $88 a year for as long as he or she owns the vehicle.
The EPA announced that its investigation into "inflated mileage claims" prompted the action by Hyundai and Kia.
"Hyundai and Kia will lower their fuel economy (mpg) estimates for the majority of their model year 2012 and 2013 vehicle models as a result of an EPA investigation of test data," said the EPA in a statement on its Web site. "Cars currently on dealer lots will be re-labeled by the auto company with new window stickers reflecting the corrected mileage estimates. The mileage on most vehicle labels will be reduced by 1 to 2 mpg and the largest adjustment will be 6 mpg highway for the Kia Soul."
The EPA issued a chart outlining how the fuel economy label values will change for the vehicles impacted by this investigation.
"With these changes, the 2012 Hyundai/Kia fleet fuel economy level is reduced by an average of 3 percent — from 27 to 26 mpg," said the statement by the two companies.
The EPA did not say if it plans to fine Hyundai and Kia for the misstatements. Krafcik told reporters he had no information about any fines or sanctions that could be levied against the automakers.
With high gas prices, automakers have used fuel economy as a major selling point — even touting modest gains over competitors.
"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," said Krafcik in a written statement on Friday. "When we say to Hyundai owners, 'We've got your back,' that's an assurance we don't take lightly. We're going to make this right for everyone."
Hyundai and Kia issued a joint statement saying they will give customers a personalized debit card that will reimburse them for their difference in the EPA combined fuel economy rating, based on the fuel price in their area and their own actual miles driven. Consumers could begin receiving the debit cards by as early as next week.
"In addition, as an acknowledgment of the inconvenience this may cause, we will add an extra 15 percent to the reimbursement," the statement said.
Prior owners of affected vehicles who have already sold their cars will also be reimbursed using the same formula. Customers are advised to visit HyundaiMPGinfo.com and KiaMPGinfo.com for more details.
Hyundai and Kia said "procedural errors" were to blame for the incorrect fuel economy ratings. One Hyundai executive, Dr. Sung Hwan Cho, attributed the misstatements to "honest" human errors in the Friday press conference. Dr. Cho is president of Hyundai's Michigan technical center.
Hyundai and Kia will roll out a full-page advertisement in national newspapers on Sunday detailing the program and apologizing to consumers, followed by direct mail and social media notification.
Edmunds says: A definite black eye for Hyundai and Kia, but they are taking steps to rebuild their reputation with consumers.