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MPG Compensation Could Cost Hyundai-Kia $100 Million
Hyundai Motor Co. and affiliate Kia Motors Corp. are likely to spend about $100 million in the U.S. to compensate the owners of 900,000 of their vehicles whose fuel economy was overstated, according to Moody's Investors Service.
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Hyundai Motor Co. and affiliate Kia Motors Corp. are likely to spend about $100 million in the U.S. to compensate the owners of 900,000 of their vehicles whose fuel economy was overstated, according to Moody's Investors Service.
Late last week the U.S. Environmental Protection Agency ordered the South Korean companies to lower the fuel efficiency claims by 1-4 miles per gallon on 13 Hyundai and Kia models from the 2012 and 2013 model years. The companies plan to issue debit cars to owners to reimburse them for lost fuel savings, plus 15%.
The $100 million estimate does not include a possible EPA fine or the cost of legal challenges. Potential class-action lawsuits were filed this week in Ohio and California seeking a combined $780 million in damages.
The more serious problem could be damage to the Hyundai and Kia brand images and American market share, Moody's opines. It notes that fuel efficiency has been a key selling point for the duo's vehicles.
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